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SMITH'S 



Financial Dictionary 



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BY 


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HOWARD IRVING 


SMITH 


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NEW YORK 
1903 






THt LibRARV OF 
CONCiRESS, 

Two Copies Received 

DEC 30 1902 

Copyright Entry 

class a^ XXo. No. 
COPY B. 



Copyright, 1902, by 
Howard Irving Smith. 



All Rights Reserved. 



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INTRODUCTORY. 



The terms embraced in the vocabulary of finance practically 
constitute in themselves a language. Furthermore, these terms 
have become legal by usage ; they have, indeed, in many 
instances, been incorporated into the statutes. The nomencla- 
ture of finance may be said to be a part of the system of finance, 
for without recourse to that nomenclature no financial proposi- 
tion can be advanced or financial engagement entered into or 
consummated. 

Smith's Financial Dictionary was compiled for the purpose 
of assembling and interpreting the terms employed in financial 
and allied commercial affairs. In addition to furnishing a cata- 
logue of terms, with their meaning, the work treats, under 
proper titles, the whole range of banking, money, credit, stocks 
and bonds, commercial paper and other negotiable instruments, 
domestic and foreign exchange, and speculation in securities 
and commodities. The Dictionary is international in its scope. 
It contains the financial and related terms in use in Great 
Britain as well as those in use in the United States ; so that 
it encompasses the list of such terms in the English language. 

To increase the utility of the Dictionary a summary of the 
monetary systems of the world is included, together with a 
table of the monetary designations of the various countries, 
with their equivalents in the moneys of both the United States 



and Great Britain. Compound interest tables and tables show- 
ing returns from investments at different prices and at different 
rates of interest or dividend also are provided. In short, the 
aim has been to omit nothing which might facilitate financial 
transactions by conveying a comprehension of financial facts, 
practises and expressions. The arrangement of the Diction- 
ary is free from complication. Desired information may readi- 
ly be obtained by turning to the appropriate term, title or 
name. 

By means of the Dictionary one unfamiliar with finance may 
promptly and adequately inform himself upon any financial 
subject. Exact understanding of the terminology of finance 
is essential to the successful conduct of financial affairs. In 
actual dealings lack of that exact understanding may be and 
often has been the cause of loss. The most thoroughly in- 
formed can hardly hope to keep in mind the multiplicity of 
terms that exist and be able likewise to define them. There 
has been need, therefore, of a permanent record of these terms, 
with sufficient elucidation of them ; and this need Smith's 
Financial Dictionary is intended to supply. 

The Dictionary is specially adapted for bankers, brokers^ 
manufacturers, merchants and lawyers. The determination of 
a suit at law frequently depends upon a clear definition of a 
term peculiar to a business or profession. The phraseology of 
finance is here presented that it may be used with precision. 



SMITH'S 

Financial Dictionary 



A 



Ai. A desig'nation signifying first class or without a supe- 
rior. 

A. As printed on the tape by the stock ticker this letter 
means assented or class A; see Assented stocks or bonds; 
also see Classified bonds and Classified stock. 

Abatement. In a contract abatement is a reduction in the 
claim by the creditor. 

"A" bond. A bond in an issue divided into a series num- 
bered alphabetically. 

Above par. When the market price is greater than the par 
or face value. For additional information see Par. 

Abrasion. The loss sustained by coins or by gold or silver 
bars by rubbing against each other or against other objects 
or substances. The value of gold or silver for export or 
import is reckoned by weight and fineness whether in coins 
or bars. 

The law says that any gold coins of the United States 
reduced in weight by natural abrasion not more than 1-2 
of I per cent aft^r a circulation of twenty years, as shown by 



SMITH'S FINANCIAL DICTIONARY. 



the date of coinage, and at a ratable proportion for any period 
less than twenty years, shall be received at their nominal value 
by the United States Treasury. 

Silver coins are worth their face value so long as the inscrip- 
tions on both sides can be deciphered. 

Mutilated coins, either gold, silver, nickel or bronze, are 
worth only their bullion value, or in other words, are worth 
only the commercial value of the metal of which they are 
composed. 

The extent to which coins may be reduced in weight by 
abrasion or wear and still be redeemable at the Treasury is 
designated tolerance or mint remedy. 

The term tolerance or mint remedy also applies to the 
allowance for a slight difference in the fineness of gold or 
silver from the government standard. In the United States 
the limit of difference in gold either above or below is one- 
thousandth ; in silver it is three-thousandths. 

Absolute indorsement. An absolute indorsement binds the 
indorser to pay on no other condition than the failure of the 
prior parties to do so and on due notice to him of their failure. 

Absorbed. When an issue of stock or bonds has passed 
into the hands of the public it has been absorbed ; and when the 
general reselling of it has ceased it has become assimilated 
or digested. Also, when a block of stock held speculatively 
has been sold it has been absorbed by the market; and when a 
settled price for it has been established it has been assimilated 
or digested. 

Acceptance. A bill of exchange (draft) payable at a future 
date which the drawee (the one upon whom it is drawn) 
accepts prior to maturity by formally acknowledging that it is 
an obligation for which he is liable. He writes (or stamps) 
across the face of the paper the word "Accepted" and beneath 
this word he inscribes the date and then signs his name. If 
he desires to make it payable at a particular bank or place he 
will write between the word "Accepted" and his name the 
stipulation that it shall be payable at such a bank or at such a 
place. Acceptance of the paper imparts to the paper itself the 
name acceptance. 

When acceptance of a bill is refused proceedings may be 
begun against the maker and indorser without waiting for the 



SMITH'S FINANCIAL DICTIONARY. 



bill to mature — without waiting for the date of payment to 
arrive. 

An acceptance is "general" (or "clean") when it assents 
without qualification to the order (draft) as made by the 
drawer; it is "qualified" when the acceptance is for a less sum 
than is named in the bill or when some modifying condition is 
imposed or attached ; and it is "supra protest" or "for honor" 
when accepted by a person other than the drawee (the one 
drawn upon) to save the honor or credit of the drawer or an 
indorser after refusal of the drawee to accept. An acceptance 
is "special" wdien the form of acceptance is special or par- 
ticular or is unusual. 

The acceptance of a draft makes the acceptor the principal 
debtor. After acceptance the drawer stands practically in the 
position of an indorser of a promissory note, being only second- 
arily liable. Acceptance admits everything necessary to 
make the acceptor liable. It admits the obligation to the 
maker of the draft and the acceptor will not afterwards be 
allowed to deny this to the damage of a holder of the paper. 

The drawee (the one who is to pay) is allowed 24 hours 
after the presentation of the bill in which to decide whether he 
wdll accept it. _This allowance of time is for the purpose of 
permitting an examination of documents accompanying a bill, 
but it likewise is granted in the case of a clean bill — a bill 
wdiich is not accompanied by documents. 

For additional information see Commercial paper ; also see 
Negotiable instrument. 

Acceptance bill. The abbreviated name for a bill for accept- 
ance ; see Bill for acceptance. 

Acceptance for honor. Said when a party other than the 
draw^ee (the one drawn upon) accepts a bill (draft) which 
has not been honored by the drawee. The purpose is to save 
the honor (credit) of the drawer, who is looked to to protect 
or reimburse the acceptor. 

Acceptance supra protest. Acceptance after protest ; accept- 
ance by a party other than the drawee (the one drawn upon) 
of a bill (draft) wdiich has not been honored by the drawee 
and has been protested. The purpose is to save the honor 
(credit) of the drawer, who is looked to to protect the acceptor. 

Acceptor. The one who accepts and by so doing promises 



SMITH'S FINANCIAL DICTIONARY. 



to pay a bill of exchange (draft). For additional information 
see Acceptance. 

Accommodation bill. A bill of exchange (draft) drawn or 
accepted as an accommodation to another. Another name for 
such a bill is non-value bill. Also see Value bill. 

In Scotland an accommodation bill is called a wind bill. 

Accommodation indorsement. Indorsement when the in- 
dorser derives no use or benefit from the. paper. The indorse- 
ment, however, involves full liability unless there is a special 
agreement to the contrary. See Accommodation party. 

Accommodation indorser. One who without consideration 
or protection indorses the paper (promissory note or bill of 
exchange or draft) of another which is not payable to himself. 

Also see Accommodation party. 

Accommodation note. A promissory note given, not for 
value received, but as an accommodation to another. There 
are also accommodation bills of exchange (drafts). 

The maker of an accommodation note is fully liable for the 
amount of it, except in special circumstances, for which see 
Accommodation party. 

Accommodation paper. Negotiable paper, as bills of ex- 
change (drafts) drawn, accepted or indorsed, or promissory 
notes made or indorsed without consideration by one person 
to enable another to obtain credit or to raise money. 

As between the maker and the accommodation indorser 
nothing can be recovered. 

Accommodation party. One who signs a negotiable instru- 
ment as maker, drawer, acceptor or indorser without receiv- 
ing value therefor and for the purpose of lending his name to 
some other person. 

Such a person is liable on the instrument to a holder for 
value (for a consideration paid in money or otherwise), not- 
withstanding that such holder knew him to be only an accom- 
modation party. 

An accommodation indorser ma}^ place his name on the 
paper with an understanding that it is a mere formality and 
that he is not to be called upon for payment in any event ; in 
another case there may be an understanding that the paper is 
to be used for some particular purpose and for no other. In 
the first case the accommodation indorser is not liable to the 



SMITH'S FINANCIAL DICTIONARY. 



iirst holder in any event; in the second case he is not Hable to 
the first holder if the paper is with the knowledge of that 
holder diverted from the purpose for which it was issued. 
But in either case he is liable to any subsequent holder who 
has taken the paper in good faith and with no knowledge of the 
restriction or limitation. The instrument cannot be enforced 
by any person who takes it in violation of such terms and con- 
ditions when notice thereof has been given. 

Account. A record or statement of debits and credits or of 
receipts and expenditures or of any business transactions. 

To account is to render a report or statement; to make an 
accounting. 

Account, The. On the London Stock Exchange the account 
means either the fortnightly settlement or the period from one 
fortnightly settlement to another. When stocks are bought 
(or sold) for the account (as distinguished from for money) 
they are to be paid for at the forthcoming settlement. There 
is one settlement about the middle of the month and there is 
another at the close of the month. 

On the London Stock Exchange most of the dealings are for 
the account, which means that the transactions are to be con- 
cluded or existing differences on them settled in the next fort- 
nightly settlement. Four consecutive days, called account 
days, are set apart twice a month for the settlement of con- 
tracts in stocks other than government stocks or bonds. In 
these latter there is a settlement only once a month. 

Buying and selling of stocks for the -account on the London 
exchange is the same as buying and selling regular way (in 
the regular way) on the New York Stock Exchange, except 
that on the New^ York exchange there is a settlement every 
da}^ for transactions of the previous day. Business for money 
(cash) on the London exchange is small, as in fact it is on 
the New York exchange. 

The word account is also used to express the extent of specu- 
lative positions open. For Instance, an operator is said to 
have a large account when he is heavily involved either on the 
bull or bear (long or short) tack (or side). It is said that 
there is a big bull or bear account in any market when opera- 
tors on the long or short side have opened large positions. 

For additional information see Settlement, The. 



10 SMITH'S FINANCIAL DICTIONARY. 

An effort to introduce dealings for the account on the New 
York Stock Exchange was not successful and was abandoned. 
Dealings as previously in the regular way were permitted at 
the same time and by this test the preference of a majority of 
the members of the exchange for dealings in the regular way 
was shown. 

Accountable receipt. A receipt given for money or property 
to be subsequently accounted for. 

An accountable receipt is given by a party who receives 
money which he is to disburse and for which he is to account. 

An accountable receipt is given by a party who receives 
(as a consignee or commission merchant) goods which he is 
to dispose of and for which he is to account. 

Account and risk. The blank forms provided by brokers to- 
be filled in by speculators in stocks, grain, cotton, etc., usually 
bear the inscription ''Buy (or sell) for my account and risk," 
which means that when an order is given to the broker it is to 
be executed for the account and risk of the customer (the 
speculator) and that the broker is merely acting as an agent in 
the matter. 

Accountant. One w^io is skilled in accounts ; an expert 
bookkeeper. 

A chartered accountant (English) is a person who holds a: 
charter (certificate) from the Institute of Chartered Account- 
ants stating that he has passed an examination and is compe- 
tent to perform an accountant's work. 

Account current or current account. Same as open or run- 
ning or continuing account ; an account that continues and in 
which a settlement is made at intervals, as every 30 days, 6o- 
days or twelve months. 

In Great Britain a current account (also called drawing ac- 
count) in a bank is one which may be added to by deposits and 
drawn against at will — at any time. On the other hand a 
deposit account is one in which money deposited remains by 
agreement for a specified time and draws interest at a speci- 
fied rate. 

Account day. This term is used loosely on the London 
Stock Exchange. It may mean any of the days during which 
the settlement (see Settlement, The) lasts, but more usually it 
means pay day; that is, the fourth and last day of the fort- 



SMITH'S FINANCIAL DICTIONARY. ii 

nightly settlement on the exchange when transactions for the 
account (see Account, The) are settled (when contracts 
entered into in the preceding half-month are settled by cash 
payments). 

Account days. Account days, as distinguished from account 
day, are the four days occupied in the fortnightly settlement of 
transactions on the London Stock Exchange, or in other 
words, the four days occupied in the settlement of each fort- 
nightly account. For additional information see Settlement, 
The. 

Account payable. An account which stands as a debit and 
to close which payment must be made. 

Account receivable. An account which stands as a credit 
and to close which payment must be received. 

Account rendered. An account presented by a creditor to 
his debtor ; it shows the obligation of the debtor to the creditor 
and in the absence of dissent from the debtor he is considered 
to have assented to its correctness. 

It is the practise in business for the creditor to render to the 
debtor on the first of each month an account for the pre- 
ceding month — that is, to present to the debtor on the first of 
the month a statement of the items entered against him in the 
preceding month. 

If the account has not been settled when the first of the suc- 
ceeding month arrives the debit and credit items are not re- 
peated in detail, but instead a statement is sent to the debtor 
reading ''To account rendered" and naming the amount due. 
If in the intervening month new items have been entered 
against the debtor these in detail follow the "account ren- 
dered" and the sum of them is added to the amount of the 
"account rendered." 

If in rendering an account the debit items are partially offset 
by credit items the difference is called "balance due." Then, 
if a settlement has not been made (the balance due has not 
been paid) when the statement is sent to the creditor on the 
first of the succeeding month the statement is inscribed "To 
balance due," with the new debit and credit items following. 

Account sales. A statement given by the broker, agent or 
commission merchant showing the state of the account of the 
one to whom it is rendered. 



12 SMITH'S FINANCIAL DICTIONARY. 

Account stated. Same as account rendered; the term ac- 
count rendered is given preference in business usage; see Ac- 
count rendered. 

Accrued dividend. The proportion of a regular dividend not 
yet payable that has accumulated at a given time after the date 
of the payment of the preceding regular dividend is called 
accrued dividend. 

Cumulative dividends which have not been paid as they fell 
due are sometimes called accrued dividends, but the correct 
term for them is accumulated dividends ; see Cumulative divi- 
dend. 

Accrued interest. The amount of interest not yet payable 
that has accrued at a given time after the last regular payment. 

Instalments of interest due and unpaid are accumulated 
interest, as distinguished from accrued interest. 

Accumulated dividends. Cumulative dividends which have 
not been paid as they fell due but instead have accumulated 
(have been added together) ; see Cumulative dividend. 

Accumulated interest. Instalments of interest due and un- 
paid. Also see Accrued interest. 

Accumulative dividend. Same as cumulative dividend; a 
dividend which if not paid regularly or in full accumulates 
and must be paid in the future. 

Accumulative stock. Same as cumulative stock ; usually 
preferred stock the dividends on which if not paid regularly 
or in full accumulate and must be paid in the future before a 
dividend can be paid on the common stock. 

Acknowledgment. A declaration or admission made and 
signed before an authorized official, such as a notary, commis- 
sioner or judge; attached to bonds, mortgages, deeds, etc. 

The purpose of an acknowledgment is to furnish satisfactory 
evidence that the instrument was signed by the person whose 
name it bears and also that he is the person described in the 
instrument. 

For forms of acknowledgment in surrendering title to securi- 
ties see Rules for delivery. 

Acquittance. A written agreement discharging a person 
from an obligation to pay a sum of money; an acknowledg- 
ment of the payment of a debt. 

Acreage. Area in acres. This term is commonly employed 



SMITH'S FINANCIAL DICTIONARY. is 

in referring to the crops. When it is said, for instance, that 
the acreage of wheat is 10,000,000 it is meant that 10,000,000 
acres of land is given up or devoted to the growing of wheat. 

Action. (Archaic). A share in a stock company. 

Also, action is French for share (of stock). 

Also, action is any proceeding instituted in a court of law. 

Actionary or actionist. (Obsolete). A shareholder in a 
stock company. 

Action of debt. An action for the recovery of money due. 

Active account. An account to which debits and credits are 
frequently added. 

An active account in a bank is one which is frequently aug- 
mented by deposits and likewise is frequently diminished by 
drafts upon (by checks drawn against) it. 

An active speculative account (as in stocks, grain, cotton or 
coffee, etc.) is one where the speculator buys and sells with 
frequency. 

Active assets. iVssets that are in use and that are produc- 
tive. 

Active capital. Ready money or property readily con- 
vertible into money. 

Also, active capital means money (or the representative of it 
in any form that may take the place of or serve as money) 
which is constantly or steadily employed. 

Active circulation. Circulating medium (money) outstand- 
ing; that is, actually in the hands of the public. 

Active money. As a money market term active money 
means a full demand for the available supply of money at good 
rates of interest. 

Active partner. One who takes an active part in the busi- 
ness ; who participates in profits and is liable for debts. 

Active security. An active stock (or bond) is one freely 
dealt in. 

An active stock may not continue active ; it may relapse 
into inactivity and then it becomes and is classed as an inac- 
tive stock. 

On the London Stock Exchange the term active is applied 
to securities in which there is a free market at close prices. 

Act of honor. Same as for honor. See Acceptance for 
honor; also see Pavment for honor. 



14 SMITH'S FINANCIAL DICTIONARY. 

Actual assets. Money, or property of true or certain value, 
as distinct from property of supposed or possible or nominal 
value. 

Actual damages. A legal term ; real or express damages. 

Actual price. The price at which a transaction is actually 
made as distinguished from the bid price (price offered by the 
buyer) and asked price (price asked by the seller). 

Actual rates (of foreign exchange). The exact rates or 
prices at which foreign exchange is sold in large amount. For 
additional information see Foreign exchange rates. 

Adjustable currency. Another name for elastic currency; 
see Elastic currency. 

Adjustment. Regulation ; arrangement. In a voluntary 
financial reconstruction the term readjustment is used ; see 
Readjustment. 

Adjustment bond. A special and little used name for a* 
bond issued for the adjustment of the finances of a company 
to its increased need for funds (money). 

For example, a railroad desires additional funds for im- 
provements or extensions. It issues adjustment bonds for 
the purpose and these are an original or first lien on new prop- 
erty or are a lien after existing liens on property that is im- 
proved by expenditures on it from the proceeds of the adjust- 
ment bonds. 

Adjustment mortgage. A mortgage that usually covers or 
represents improvements ; usually, also, it is subsequent in 
lien or claim to another mortgage. For additional informa- 
tion see Adjustment bond. 

Admission to dealings at the New York Stock Exchange. 
When stocks or bonds are admitted to dealings at the New 
York Stock Exchange they are officially announced, if placed 
on the regular list, as having been "admitted to the list;" if 
not placed on the regular list they are announced as having 
been "admitted to quotation in the unlisted department." 

There is very little difference between "admitted to the 
list" and "admitted to quotation in the unlisted department." 
The chief purpose of the unlisted department is to provide 
for dealings in securities which do not in all respects meet the 
requirements for admission to the regular list as it is com- 
monly called ; it is also intended to provide for dealings in secu- 



SMITH'S FINANCIAL DICTIONARY. 15 

rities of new companies pending the perfecting of their or- 
ganizations and the completion of their plans, after which the 
securities are to be transferred to the regular list. 

Xhe requirements that must be complied with to gain for an 
issue of stocks or bonds admission to dealings at the exchange 
are stated in detail in a printed circular designated as the 
"'requirements for listing" which is supplied by the exchange 
for the information of companies that desire to have their 
securities dealt in at the exchange. 

A company must furnish proof of its own legality, proof of 
the legality of title to its property and proof of the legality 
of the securities issued by it ; it must furnish a detailed state- 
ment of its affairs, including its financial condition ; must fur- 
nish a copy of its charter or articles of incorporation, a copy of 
its by-laws, etc. Furthermore, its certificates representing its 
securities must meet the requirements of the exchange in 
their form and in the engraving and printing of them and 
also in the denominations for which they are made out. Like- 
wise, a transfer agent (usually a trust company or a bank) 
must be appointed or a transfer office established ; also a 
registrar (usually a trust company or a bank) must be ap- 
pointed. — 

Only certificates for stock that has actually been issued 
(sold or otherwise disposed of for a consideration) are ad- 
mitted to dealings and the same is the case with bonds. Stock 
which has never been issued but is held in the treasury of a 
company is not admitted and the same is the case with bonds. 

In the dealings on the stock exchange there is no distinction 
between "listed" and "unlisted" stocks ; the same privileges 
and facilities are accorded to both and the same rules apply 
to both. 

An application to admit a stock (or an issue of bonds) to 
the list, or as it is commonly called, regular list, first goes be- 
fore the committee on stock list, which, if it ascertains that all 
requirements have been complied with, recommends admission 
to the list; then the adoption of the recommendation by the 
governing committee places the stock on the list and permits 
dealings in it. An application to admit a stock to dealings in 
the unlisted department requires approval only by the com- 
mittee on unlisted securities. 



i6 SMITH'S FINANCIAL DICTIONARY. 

When a stock (or other security) is admitted to deaUngs on 
the London Stock Exchange it is either granted an official 
quotation, that is to say, is placed in the official list published 
under supervision of the committee for general purposes ; or 
if, as is the case with the majority of mining shares, it cannot 
fulfil the necessary requirements for official listing it is dealt 
in on the market and is quoted on the tape and in the news- 
papers if of sufficient importance. A considerable propor- 
tion of the securities dealt in on the more speculative markets 
(see Market) are not included in the official list. 

Advance. A sum paid by a party to a contract on account 
of and before completion of the same ; money paid before it is 
legally due, as money paid against a consignment of goods 
received but not yet sold. 

Advance as used in speculation in stocks, grain, cotton^ 
coffee, etc., means an upward movement in prices. 

Advancement. Same as advance ; a payment of money be- 
fore it is due. 

Adventure. The importation or exportation of goods on 
speculation. The term is almost obsolete, but it formerly 
\vas commonly applied to the sending of goods abroad for sale 
at best prices obtamable, the goods being at the owner's risk. 
The term now generally used is consignment. 

Also see Bill of adventure. 

Advice. An abbreviation for letter of advice ; see Letter of 
advice. 

Afifreightment. A contract by which a vessel is hired to 
carry merchandise. 

Afloat. A word used in the grain trade to designate grain 
which has been loaded into vessels for export or grain which 
is on passage but has not arrived at destination. 

After sight. As applied to a bill of exchange (draft) this 
term means after acceptance by the drawee (the one who is 
to pay the bill). Thus, sixty days after sight means that the 
bill is to be paid sixty days after the date of acceptance. 

Agency. An agency is created by an agreement by which 
one person delegates to another authority to act for him. 

Agency in the sense of influence on prices in the specula- 
tive markets means the same as factor and (sometimes) ele- 
ment. 



SMITH'S FINANCIAL DICTIONARY. 17 

Agend or agendum. A programme of the business to be 
transacted at a meeting (as a meeting of a stock company). 

Agent. One authorized to transact business for another. 

A principal is responsible for the act of an agent, but the 
agent who exceeds his authority renders himself personally 
liable. 

An agent cannot bind his principal by any act performed 
contrary to instructions unless it be an act which agents of 
his class usually have authority to perform and the person 
with whom he is dealing is ignorant of the instructions which 
limit the agent's powers in that particular case. A person 
dealing with an agent is entitled to assume if not advised to 
the contrary that he has the authorit}- usually possessed by 
agents in the same line of business. If a person dealing with 
an agent knows that the agent is acting contrary to his in- 
structions the principal is not bound by the agent's acts. 
Otherwise he is bound. 

Anv commission that an ao-ent undertakes to execute he 
by implication represents himself as able to do in a reason- 
ably correct and successful manner. If by reason of his own 
ignorance of his duties as agent his work is of no value he 
cannot charge for it. 

An agent is bound promptly to obey all proper instructions 
of his principal and faithfully and particularly to account for 
all the money and other property of his principal which may 
have come into his hands. Such an accounting he is bound to 
make at some reasonable time without special instructions 
and he is bound to make it at any time when he is called upon 
to do so. An agent who persistently disregards his principal's 
demand that he shall make an accounting is derelict in a duty 
which the law enforces with strictness and he has therebv 
given sufificient cause for his dismissal. \'\lien a reasonable 
time has elapsed after the demand for an accounting and the 
agent has no valid excuse for a failure to make it. as sickness 
or unavoidable accident, he may be discharged. 

An agent having the custody of his principal's property is 
bound to insure it if instructed to do so. Moreover, he is 
bound to insure it without special instruction if it has been 
his own custom or if it is a common custom of agents having 



i8 SMITH'S FINANCIAL DICTIONARY. 

the custody of property o£ that kind to insure it without in- 
struction to do so. The owner of property is justified in sup- 
posing that the usual custom will be followed by his agent in 
caring for the property without any special instruction and 
in the event of the agent's failure to follow the custom he is 
liable for a loss suffered by his principal through such neglect. 
In any other case he is not bound to insure unless he receives 
specific direction to do so. 

If an agent (or executor or trustee or attorney) deposits in 
a bank or other depository in his own name money which he 
holds in trust it shall be the agent's loss in case the bank (or 
depository) fails. The reason of the rule is that an agent 
cannot be allowed to determine after a loss whether the 
money on deposit was his own or that held by him in trust. 
The presumption is that a deposit belongs to the depositor 
and the agent (who is a trustee) is not allowed by the courts 
to dispute that presumption after a loss. If the agent wishes 
to charge his principal with the loss if any should occur he 
must state to the principal when the deposit is made that it is 
the money of the principal and not his own ; that he is not 
only an agent but that in this particular transaction he is 
acting in that capacity. 

If there is nothing in an agreement to the contrary a 
broker's commission is earned when a sale has been made and 
all that he engaged to do has been done. Whether the con- 
tract into which the buyer and seller have entered as a result 
of the broker's negotiation is carried out or not has no effect 
upon the validity of the broker's claim for his commission. If 
there is nothing in the agreement and if there is no trade 
usage to the contrary a broker's commission is due and pay- 
able as soon as earned. On the other hand, if the exact 
amount of a broker's commission in any particular transaction 
is to be ascertained at some time after the transaction is made 
the broker cannot claim any part of the sum until the full 
amount is determined. 

One may after ceasing to act as agent of another find that 
the results of his efforts are still availed of by his former 
employer. His particular methods of doing business and his 
list of customers are both likely to be familiar to the employer, 
who may make any use of them he sees fit which is not fraudu- 



SMITH'S FINANCIAL DICTIONARY. 19 

lent. Such use can be prevented only by a contract between 
the principal and agent. 

For additional information see Principal. 

Agent de change. The title of a member of the Paris and 
other European bourses. On the Berlin Bourse there are 
agents de change and sworn agents de change, the latter deal- 
ing chiefly in government securities. 

On the Vienna Bourse there are only sworn agents de 
change, who are under control of the government. 

The German spelling of bourse is boerse. 

For -particular information as to the Paris Bourse see Paris 
Bourse. 

Agio. The premium payable for the exchange of one kind 
or quality of money into another ; a deduction for deprecia- 
tion of coin by wear. 

Agiotage. A little used term for money-changing or for 
brokerage in foreign moneys. 

Agreement. A contract or instrument expressing terms 
agreed upon between two or more persons. 

AJ. As printed on the tape by the stock ticker these letters 
mean adjustment, as adjustment bonds. 

A Tescompte. On the Paris Bourse a party who has sold 
for future delivery can be required to deliver securities 
a I'escompte (under discount) at an earlier date than that 
named in the contract if a demand for delivery is made by the 
buyer. 

Allison act. The usual designation is the Bland-Allison 
act ; the act (Allison's amendment of the Bland bill) which was 
passed over the veto of President Hayes and became a law 
February 28, 1878, providing for the purchase by the govern- 
ment of not less than $2,000,000 and not more than $4,000,000 
worth of silver bullion each month and the coinage of it into 
silver dollars, these to be legal tender. It was superseded b}'- 
the so-called Sherman act, which see. 

Allocation. Apportionment ; allotment ; assignment. The 
term allocation of stock is occasionally used, meaning allot- 
ment of stock. 

Allonge. A piece of paper attached to a (foreign) bill of 
exchange to receive indorsements for which the original does 
not afford space. 



20 SMITH'S FINANCIAL DICTIONARY. 

Allotment. Share or portion. 

An allotment in an underwriting is the amount assigned to 
a member of (subscriber to) the underwriting syndicate. An 
allotment of an issue of stock or bonds is the amount assigned 
to a subscriber, which may be less than the amount applied 
for if the total subscription exceeds the total amount offered 
for subscription. 

Allotment and regret. When an issue of stock has been 
oversubscribed a letter of allotment and regret is sent to each 
subscriber informing him of the number of shares allotted to 
him and expressing regret that the full amount appKed for 
could not be allotted. 

Allotment letter. A letter informing an applicant for securi- 
ties of a new company (or new securities of an existing com- 
pany) of the amount allotted to him. 

Allottee. An applicant for securities of a new company or 
for new securities of an existing company Avho receives a part 
or the whole of the securities that he has applied for. 

All-'round price. Same as overhead price ; a price which 
covers cost and all charges, including what usually are extra 
charges. 

Alongside. A commercial term. Goods delivered along- 
side are goods delivered at or by the side of the ship in which 
they are to be cargo. 

American market. Designation for the group of jobbers 
on the London Stock Exchange who deal exclusively in Amer- 
ican securities ; also the place where they congregate is called 
the American market. Canadian Pacific Railway shares are 
dealt in in the Ameiican market ; but those of the Grand Trunk 
Railway of Canada are dealt in in a separate department. 

American rails. London Stock Exchange name for the 
stocks of American railroads. 

Americans. A designation on the London Stock Exchange 
for American stocks and bonds ; not securities of the United 
States government, but American railroad and industrial secu- 
rities ; the name Yankees also is used. 

American stocks in London. In dealings in American 
stocks on the London Stock Exchange 4 shillings is counted as 
$1. Four shillings being equal to 97 1-3 cents the price of an 
American stock must be 2 2-3 per cent (quotably 2 5-8 per 



SMITH'S FINANCIAL DICTIONARY. 21 

cent) higher in London than in New York if the London 
price is to be equivalent to (or at a parity with) the New York 
price. Not 2 5-8 per cent of the par or face value is to be 
added arbitrarily to the New York price, but 2 5-8 per cent of 
the New York price, whatever it may be, is to be added to the 
New York price to make an equivalent London price. 

Thus, for a stock selling at 50 in New York the equivalent 
price in London would be 51 3-8 (while the fraction 3-8 is not 
strictly correct it is quotably correct). For a stock selling at 
100 in New York the equivalent price in London would be 
102 5-8. Conversely, for a stock selling at 100 in London the 
equivalent price in New York would be 97 3-8 and for a stock 
selling at 50 in London the equivalent price in New York 
would be 48 5-8. 

Amortization or amortizement. The extinction or reduc- 
tion of a debt by means of a sinking fund. 

Ancillary receiver. An assistant receiver, as a receiver in 
one state of the property of a company which is domiciled 
(chartered or incorporated) and has its chief place bf business 
in another state. The receiver, as distinguished from the an- 
cillary receiver, is situated in and derives his authority from 
the state where the company is domiciled. 

And interest. When a bond is sold at a fixed price "and 
interest" the interest which has accrued or accumulated on it 
up to the date of the transaction is added to the fixed price. 
The fixed price with the interest added is the total price. 

For instance, if a bond is sold at 100 and i per cent in inter- 
est has accrued on it the total cost of the bond is loi. 

Annuity. A fixed allowance or income received in one or 
more payments annually. 

Many insurance companies sell annuities — that is, in con- 
sideration of a specified sum paid to them they will return 
(pay) to the person for whom the annuity is bought so much 
per year during his or her lifetime or for a specified time. 

The official title of what are commonly known as British 
consols is "consolidated annuities." The word annuity means 
a promise to pay so much per annum, either for the life of the 
holder or for a fixed period or in perpetuity. Annuities, 
generally terminable at a fixed date, have been issued in pay- 



22 SMITH'S FINANCIAL DICTIONARY. 

ment for several of the Indian railways that have been pur- 
chased by the Indian government. 

Anthracite coal. Commonly called hard coal ; mineral coal, 
with a bright, sub-metallic, iron-black lustre, consisting of 
nearly pure carbon and burning almost without flame. It is 
graded into eight sizes: Buckwheat (the smallest size), pea, 
cherry, chestnut, stove, ^gg, broken and steamship (the largest 
size). 

Anthracite coal contains a very small amount of volatile 
matter. Anthracite proper contains from 3 to 10 per cent of 
such matter; graphitic anthracite contains from i to 3 per 
cent. Anthracite coal is found in commercial quantity in the 
United States only in the state of Pennsylvania. 

Anti-gold law. Just before the retirement of Secretary Sal- 
mon P. Chase from the Treasury Department he induced Con- 
gress to pass a bill to "prohibit certain sales of gold and foreign 
exchange." Its object was to prevent speculation in gold in 
the Gold Room in New York. It prohibited the purchase or 
sale of gold or foreign exchange except at the regular ofifice of 
the purchaser or seller and also surrounded transactions in 
both with further restrictions. 

The idea behind the measure was that it would render the 
price of gold more stable. The efifect was exactly the oppo- 
site. The law went into effect on June 17, 1864. The next 
day the price of gold had jumped 10 per cent; the following 
day 22 per cent was added to the price, and within two weeks 
it had advanced 20 per cent more to 250. On July 2, 1864, the 
act was repealed without debate. 

A one. Written Ai ; a designation signifying first class or 
without a superior. 

APD. As printed on the tape by the stock ticker these 
letters mean assessment paid. 

Appropriation. Money set apart for a special use ; also the 
application of property of a debtor to one of several debts. 

Arbitrage. The buying and selling of the same thing in 
different markets, as New York and London, for the purpose 
of making a profit from the difference in quotations between 
such markets; said chiefly of dealings in stocks and bonds, but 
also of dealings in exchange. 

Arbitrage in stocks is based and conducted on temporary 



SMITH'S FINANCIAL DICTIONARY. 23 

differences in prices between different markets for the same 
stocks. In ordinary circumstances every stock has the same 
value in every market in which it is dealt in. 

When a stock is selling at a higher price in one market than 
in another it is sold in the market where the higher price pre- 
vails and is bought in the market where the lower price pre- 
vails. The operator relies on a return to the same price in 
both markets. When the equality in price is restored he 
closes his transaction by buying where he sold and selling 
where he bought. The difference in price that had existed 
represents his profit when the equality in price is restored and 
his transaction is closed. 

For example, if a stock is selling in one market at 100 and 
in another at 98 it is sold in the first market at 100 and bought 
in the second market at 98. If the stock in the second market 
adA'ances to 100 while it remains stationary in the first market 
it is sold in the second market and 2 per cent is made on the 
transaction there, and it is bought in the first market at 100 
and neither profit nor loss results from the transaction there. 
Or, if the stock declines to 99 in the first market and advances 
to 99 in the second market the closing of the transaction 
results in a profit jDf i per cent in each market or 2 per cent in 
the two markets. 

Owing to the system of calculating values for American 
stocks on the London Stock Exchange prices on the London 
exchange are 2 5-8 per cent of the market prices, whatever they 
may be, higher than the prices for the same stocks on the New 
York Stock Exchange Avhen they are the equivaleht of the 
prices on the New York exchange. In arbitrage dealings 
allowance has to be made for this difference in prices between 
London and New York, w^hich is seeming and not actual. For 
a completer explanation see American stocks in London. 

The difference in equivalent prices between New York and 
London permits two kinds of operations In stocks that are 
dealt in in both markets. One operation is called a spread 
and the other is called a back spread. 

In the spread there must be more than the normal differ- 
ence in prices between London and New York. The stock is 
sold in London where the higher price prevails and is bought 
in New York where the lower price prevails. Then when the 



24 SMITH'S FINANCIAL DICTIONARY. 

equality in price is restored the transaction is closed by buying 
in London and selling in New York. The profit is the amount 
of the difference that had existed in excess of the normal differ- 
ence. 

For example, when a stock is selling in New York at lOO 
the equivalent price in London is 102 5-8. Should the stock 
while selling in New York at 100 be selling in London at 
104 5-8 the normal difference would be exceeded by 2 per cent. 
The speculator would sell in London at 104 5-8 and buy in 
New York at 100. Should the price in London drop 2 per 
cent he would buy in London at 102 5-8 and on the transac- 
tion there would make 2 per cent, while he would sell in New 
York at 100 and on the transaction there would neither gain 
nor lose. Should there be a decline of i per cent in London 
and an advance of i per cent in New York in restoring the 
equality or equivalent in prices there would be a profit of i 
per cent in each place or 2 per cent in the two places. 

In the back spread there must be less than the normal 
difference in prices between New York and London. The 
stock is bought in London where the higher price prevails and 
is sold in New York where the lower price prevails. Then 
when the equality is restored the transaction is closed by sell- 
ing in London and buying in New York. The profit is the 
amount of the difference that had existed less than the normal 
difference. 

For example, when a stock is selling at 100 in London the 
equivalent price in New York is 97 3-8. Should the stock 
while selling in New York at 97 3-8 be selling in London at 
98 the difference in price would be 2 per cent less than the 
normal difference. The speculator would sell in New York 
at 97 3-8 and buy in London at 98. Should the price in Lon- 
don advance 2 per cent while the price in New York re- 
mained stationary he would sell in London at 100 and on the 
transaction there would make 2 per cent, and he would buy 
in New York at 97 3-8 and on the transaction there would 
neither gain nor lose. Should there be a decline of i per cent 
in New York and an advance of i per cent in London in 
restoring the equality or equivalent in prices there would be a 
X)rofit of T per cent in each place or 2 per cent in the two places. 

The arbitrage business in stocks between New York and 



SMITH'S FINANCIAL DICTIONARY. 



'^3 



London is large. When stocks are bought in New York and 
sold in London, or are sold in New York and bought in Lon- 
don, the cable is used for the transmission of orders from one 
place to the other. 

By the clock London is five hours ahead of New York. 
When the New^ York Stock Exchange opens it is lo a. m. in 
New York, but it is then 3 p. m. in London. The London 
Stock Exchange opens at 11 a. m. and closes at 4 p. m. except 
on the last day of the account (see Account, The), when it 
closes at 4.30 p.m. On Saturday 1.30 p.m. is the closing time. 

After the closing of the London exchange the business in 
American stocks continues in the street, in Shorter's court. 
In this street market a good part of the arbitrage business in 
American stocks is conducted. Very little arbitrage business 
is transacted in New York before the opening of the New 
York Stock Exchange. The most that is done is to send 
orders to London for execution. No orders are executed in 
New York until the New York Stock Exchange opens for the 
reason that there is no street market in New York. For an- 
other thing it is too early in the day. When the London ex- 
change opens at II a. m. it is only 6 a. m. in New York. 

The London brokers remain in Shorter's court as long as 
there is business to keep them, but ordinarily they cease deal- 
ings at 5 o'clock or soon after. They seldom continue trans- 
actions later than 6 o'clock. 

The orders sent from New York to be executed in London 
and those sent from London to be executed in New York are 
"rushed" by the cable companies, for it is a profitable business 
for the companies. It takes very few minutes to effect an 
arbitrage transaction by cable. 

It is the effort in arbitrage dealings to balance transactions 
each day — that is, to sell as many stocks as are bought or to 
buy as many stocks as are sold. When the selling exceeds 
the buying the excess selling is designated as selling on bal- 
ance ; when the buying exceeds the selling the excess buying 
is designated as buying on balance. The next day, if possible, 
the discrepancy is adjusted. 

Sometimes arbitrage transactions in stocks cannot be evened 
up in the usual way and stock certificates have to be shipped 
to effect an adjustment. 



26 SMITH'S FINANCIAL DICTIONARY. 

There is arbitrage in grain, cotton, coft'ee, etc., between 
different markets in one country or between a market in one 
country and a market in another country the same as in 
stocks between New York and London. For examples see 
Spread; also see Back spread. 

The term arbitration is more commonly used than arbitrage 
in reference to operations in exchange that are based on 
differences in prices between different markets. For informa- 
tion see Arbitration of exchange. 

Arbitrage broker. One who handles arbitrage business. 
For information see Arbitrage. 

Arbitrager or arbitrageur or arbitragist. One who is en- 
gaged in arbitraging. For information see Arbitrage. 

Arbitraging. Dealing in two markets to profit by the differ- 
ence in prices. 

In stocks an arbitrage business may be conducted between 
New York and London or between New York and Boston or 
between New York and any other market. Grain, cotton, etc., 
are dealt in under the same conditions. For additional in- 
formation see Arbitrage. 

Arbitration of exchange. A calculation based on rates of 
exchange to determine the difference in money values at three 
or more places ; or, a calculation based on the money values at 
three or more places to determine the ratio of exchange be- 
tween the different places. Where three places are concerned 
the calculation is called simple arbitration ; where more than 
three places are concerned the calculation is called compound 
arbitration. 

As an operation (as distinguished from a calculation) arbi- 
tration of exchange consists in dealing for profit in exchange 
between three or more places. The profit is derived from 
the difference in the rates of exchange on the several places. 

As an example of simple arbitration of exchange a banker 
in New York sells a bill of exchange on London and covers it 
(pays it) by forwarding to London a bill on Paris for an 
equivalent amount purchased by him (the banker) at a lower 
price. Or, the banker in New York buys a bill on London and 
sells against it a bill on Paris, which latter bill (the bill on 
Paris) he covers by forwarding to Paris in payment of it the 



SMITH'S FINANCIAL DICTIONARY. 27 

bill on London. Simple arbitration of exchange is a tri- 
angular operation in exchange. 

As an example of compound arbitration of exchange a 
banker in New York sells a bill on London, buys a bill on Ber- 
lin and with the bill on Berlin buys in Paris a bill on London 
to cover (pay) the bill on London sold by him (the banker). 
Or, the banker in New York buys a bill on London, sells a 
bill on Berlin and with the bill on London buys in Paris a bill 
on Berlin to cover (pay) the bill on Berlin sold by him (the 
banker). When four points are involved the term quad- 
rangular operation applies. 

Arbitration of exchange may be extended so as to include 
five or six or more places. 

Area. Space or extent as measured in square miles, acres 
or square feet. When the term is used in referring to the 
crops it means the area or extent in acres. Thus, when it is 
said, for instance, that the area of wheat is 10,000,000 it is 
meant that 10,000,000 acres of land is given up or devoted to 
the growing of wheat. 

Arrha. The Latin term for earnest money; that is, money 
given to bind a bargain. 

Article. In rnaking exchanges at the Bankers' Clearing 
House in London the term article means a check, draft or 
other paper calling for payment. The term employed in the 
L'nited States is item or collection item. 

Articles of agreement. The written terms of a bargain, 
contract, or covenant. 

Articles of association. Another name for articles of incor- 
poration, but in the United States the term articles of asso- 
ciation applies to a social, political, mutual-benefit, benevo- 
lent or similar organization of individuals more particularly 
than to a joint-stock company. See Articles of incorporation. 

In Great Britain the term articles of association means the 
table of conditions under which a joint-stock company is con- 
stituted. They apply only to the internal regulations of the 
company. For additional information see Memorandum of 
association. 

Articles of incorporation. The certificate filed in conform- 
ity with a general law by persons who desire to form a cor- 
poration (joint-stock company) setting forth the purposes 



28 SMITH'S FINANCIAL DICTIONARY. 

of the corporation, etc. This certificate is often wrongly called 
a charter; see Charter. 

Asked price. The price asked for a thing. For additional 
information see Bid and asked. 

As per advice. A term frequently used in a bill of exchange, 
meaning that notic'e has been given (or is to be given) to the 
drawee (the one who is- to pay the bill) that the bill has been 
drawn upon him. 

As per indorsement. Occasionally when a foreign bill of 
exchange is drawn in the money of the country where it origi- 
nates but is payable in another country it is made payable *'as 
per indorsement" — that is, it is payable in the money of the 
second country at the rate of exchange indorsed on the bill. 

Example : If a person in New York draws on a person in 
London for $25,000 the rate at which it is to be paid in pounds 
sterling is indorsed on it. Thus, if payable at $4.86 per pound 
each pound counts as $4.86 in paying the bill. 

Assay office. A laboratory for examining ores, usually gold 
and silver, to determine their economic value. 

The term usually applies to an establishment (there are 
several such) maintained by the United States government to 
refine gold and silver delivered to it in ingots. It will refine 
the gold or silver for a compensation and return it, or it will 
buy gold refined by it, paying for it with an order on the Unit- 
ed States Treasury for gold coin (or gold certificates) to an 
equal amount. It is not permitted to buy silver. 

Assay office bar. A bar of fine (pure) gold or silver as- 
sayed (and manufactured) by an assay office belonging to 
the United States government. 

A bar assayed by a private concern is designated as a com- 
mercial bar. 

Assay office check. A check on the United States Treasury 
drawn by an assay office and given in payment for gold de- 
posited in the assay office. 

Assented stocks or bonds. Stocks or bonds deposited 
under an agreement by which the owners assent to some 
change in the status of the securities. 

In reorganizations that are voluntary, or in other words, 
without foreclosure or other legal process, the owners assent 
to the exchanofe of their stocks or bonds, or both, for new 



SMITH'S FINANCIAL DICTIONARY. 29 

issues, perhaps less in amount and perhaps receiving less in 
dividends or interest. For additional information see Re- 
adjustment. 

Assessment. The name applied to a demand or call from a 
company upon stockholders to pay into the treasury of the 
company a specified sum per share. It is common in the 
reorganization of a concern to levy an assessment on the stock 
to obtain funds for the discharge of debts and for working 
capital. 

Asset currency. Currency secured by the general assets of 
the issuing bank instead of by government bonds as at present 
under the National bank act. 

The two essentials for this form of currency are safety and 
elasticity. There is general agreement as to the desirability 
of a currency that shall be responsive to the demands of busi- 
ness, expanding in volume when trade is brisk and contracting 
in the dull intervals, thus insuring stability of interest rates 
and preventing stringency at one period and redundancy at 
another. 

Gold and silver money and the government issues of paper 
money are practically permanent in volume, except that as 
new gold is brought to the mint it gradually increases the 
supply but affords no opportunity for alternate expansion 
and contraction. 

The present national bank notes are issued under such con- 
ditions of bonded security as to make them almost equally 
irresponsive to varying business requirements. They have, 
moreover, a tendency toward disappearance, parth^ because 
there is scarcely enough profit in them to warrant the trouble 
of issuing them and partly because, with the gradual payment 
of the national debt, the supply of bonds available for security 
will eventually be too insignificant to be of use. 

The need for an automatically elastic currenc}^ is a con- 
stantly growing factor in the business world. The nature of 
the need may be seen from the movements of money during 
the harvest season in the West and Northwest and the cotton 
picking season In the South, At such times large sums in 
currency are withdrawn from the financial centres and scat- 
tered over a large area of the country. When the particular 
activity which attracted these funds Is over and the Imrae- 



30 SMITH'S FINANCIAL DICTIONARY. 

diate. use for them has passed they naturally flow back in 
search of profitable occupation in the money centres. These 
alternate movements, from whatever cause they arise, natu- 
rally result in a plethora of money at one time and a scarcity 
at another, driving interest rates up and down and generally 
disturbing business. 

The object of an elastic currency would therefore be to 
supply extra funds when more money is needed for temporary 
purposes and to retire those funds from circulation when they 
are not needed, preventing fluctuation in interest rates and 
automatically adjusting the supply of money to the varying 
conditions of business. 

It is generally conceded that such a currency. can be ob- 
tained only through the instrumentality of banking credit. 
By far the larger part, more than 95 per cent, of the business 
of the country is transacted by means of bank credits ex- 
pressed through the medium of checks and drafts (bills of 
exchange). These credits adjust themselves automatically 
imder the wise supervision of bank officials. It is urged that 
the same principle could be applied to the issuing of bank 
notes as another form of credit which would be available in 
small transactions as bank checks are in large. 

In order to accomplish this it would be necessary to author- 
ize banks to issue notes against their general assets and repu- 
tation. What restrictions should be exercised to prevent 
abuse of the authority is the crucial question in the contro- 
versy. A depositor in a bank risks his money and his credit 
with a knowledge of the general standing of the bank, its 
stockholders and its officers, and of its condition as shown by 
its reports. A man who accepts a check drawn on a bank has 
knowledge both of the bank and of the man who signs the 
check. A man who accepts the note of a bank, perhaps thou- 
sands of miles from its place of origin, cannot have this in- 
formation, therefore the restrictions under which the note is 
issued must be such as to safeguard in a general way his 
interest and insure his protection against loss or the system 
will fall and the bank notes will fail to circulate. 

Various plans for a bank currency system that will meet 
the necessary requirements have been advanced. Lyman J. 
Gage when Secretary of the Treasury suggested that banks 



SMITH'S FINANCIAL DICTIONARY. 31 

be permitted to issue circulating notes up to the amount of 
paid-up capital upon the deposit of 30 per cent of the amount 
in United States bonds and 20 per cent in United States notes, 
leaving 50 per cent as a charge against the general assets of 
the bank. This unsecured portion of the circulation he pro- 
posed should be further guaranteed by the establishment of a 
fund to which all the banks should contribute through a semi- 
annual tax of 1-8 of I per cent on their capital, which con- 
tributions should be held on deposit by the Treasurer of the 
United States and be used for the redemption of notes of failed 
banks. 

The American Bankers' Association in 1894 proposed a 
plan, known as the Baltimore plan, which would permit banks 
to issue unsecured notes up to one-half of their unimpaired 
capital, subject to a tax of 1-2 of i per cent annually. In 
addition they might issue "emergency circulation" to the ex- 
tent of 25 per cent more, subject to a heavier tax. A guar- 
antee fund of 5 per cent of the circulation was to be held by 
the Treasury for redemption of notes of failed banks and the 
Treasury was to' have a first lien on the assets of such banks. 

Another plan would permit the issue without bond security 
of notes to the -amount of 75 per cent of paid-up capital, the 
notes to be a first lien on assets. If the assets fell short of the 
note issues deficits were to be made good by a pro-rata assess- 
ment on the banks in the same state with the failed bank. This 
plan also provided for an "emergency circulation" equal to 
two-thirds of the authorized circulation, subject to an annual 
tax of 6 per cent. 

John G. Carlisle when Secretary of the Treasury proposed 
that banks be permitted to issue circulation tip to 75 per cent 
of the paid-in capital upon the deposit of 30 per cent of the 
amount of circulation with the Treasurer of the United States 
in the form of United States notes and Treasury notes. A 
guarantee fund of 5 per cent was to be accumulated for the 
immediate redemption of notes of failed banks, encroachments 
upon this fund to be made good by assessment, pro-rata, on 
the other banks in the case of a final deficiency in the assets 
of the failed bank. 

It has also been suggested that safety and elasticity might 
be obtained by delegating the authority to issue notes to the 



SMITH'S FINANCIAL DICTIONARY. 



clearing houses of the large cities or to clearing houses to be 
established by states, thus giving to the notes the security of 
the combined strength of the banks so associated. 

Still another plan, drawn up by the Banking and Currency 
committee of the Fifty-seventh Congress, and known as the 
Fowler bill because it was introduced by Charles N. Fowler, 
chairman of the committee, provided for a gradual emission 
of bank notes without bond security, beginning in the first 
year with lo per cent of the paid-up capital and increasing 
lo per cent a year until a maximum of 60 per cent should be 
reached. Permission so to issue notes was to be conditioned 
upon the assumption by the bank emitting the notes of the 
current redemption of an amount of United States notes equal 
to 20 per cent of its capital. A tax of 1-8 of i per cent, semi- 
annually, was to be imposed on the first 20 per cent of notes 
taken out and 5-8 of i per cent, semi-annually, on the suc- 
ceeding 40 per cent. In addition, after six years, an extra 
"emergency circulation" of 20 per cent might be taken out, 
subject to a tax of i 1-2 per cent, semi-annually, and after 
seven years still another 20 per cent, subject to a tax of 2 1-2 
per cent, semi-annually. The Fowler bill also provided for 
the creation of a guarantee fund of 5 per cent for the 
redemption of notes of failed banks. Other provisions in- 
volved concurrent cancellation of a certain amount of United 
States notes and provided for other changes in the currency 
and banking laws, but the foregoing synopsis covers the main 
features as far as asset currency is concerned. 

Canadian bank notes, and also the old New England bank 
currency which was redeemed through the operation of the 
Suffolk Bank system, are pointed to as illustrations of the 
safety and elasticity of a properly conducted asset currency 
system. 

Assets. The entire property of a person, corporation or 
estate. For instance, the assets of an individual comprise all 
the property that he owns which is applicable to the payment 
of his debts, as "His assets exceed his liabilities." 

Property that is mortgaged or is otherwise encumbered is 
counted as an asset, but the debt that it secures must first be 
paid out of the proceeds of it, so that only the equity in it is 
available to apply in the' liquidation or payment of unsecured 



SMITH'S FINANCIAL DICTIONARY. 33 

debts or claims. The equity is the difference between the 
value of the property and the amount of the obligation (debt) 
to secure the payment of which the property is pledged. 

Assign. To transfer in writing the ownership or control 
of property, rights or interests ; to make an assignment. 

Also, an assign is one to whom property, rights or interests 
have been transferred or made over. 

Assigned in blank. The common term is signed in blank; 
a formal assignment of a stock or bond or of other property 
in which the space for the name of the new owner is left blank. 

A stock certificate or a registered bond assigned in blank 
should not be received from a stranger without proper identi- 
fication and satisfactory evidence of the genuineness of the 
assignment and attestation. 

The English term which is equivalent to assigned in blank 
is transferred in blank. 

Assigned stocks or bonds. Stocks or registered bonds as- 
signed for transfer. The securities may be assigned in blank 
or specifically to an individual. 

Assignee. The one to whom property, rights or interests 
have been assigned either for himself or in trust ; a trustee. 

Assignment. The act of assigning or transferring or of 
allotting or awarding. 

Also, an assignment is the instrument in writing by which 
property, rights or interests are transferred. 

Assignment for the benefit of creditors. The act by which 
an insolvent transfers his property to a trustee (assignee) who 
is empowered to manage and sell the same and to pay the 
proceeds to his creditors. 

Assimilated. For the application of this word in dealings in 
stocks and bonds see Absorbed. 

Associated banks (of New York). The banks in New York 
that are associated in making daily exchanges or clearings at 
the clearing house ; in other words, the banks that belong to 
the clearing house ; or, in still other words, the banks that are 
members of the Clearing House Association. 

For an explanation of the method employed in making clear- 
ings see Clearing house of the associated banks of New York. 

"A" stock. This is the English designation for deferred 
ordinary (common) stock. When for dividend purposes the 



34 SMITH'S FINANCIAL DICTIONARY. 

ordinary stock of a company has been divided into two parts 
called preferred or ''B" stock and deferred or "A" stock the 
dividend on the A stock is deferred until a fixed amount has 
been paid on the B stock. 

This B or preferred stock is not the same as preferred stock 
in the United States. What in the United States is called pre- 
ferred stock is in Great Britain called preference stock and 
preference stock in Great Britain may be divided into two or 
more classes called first preference, second preference, etc., just 
as preferred stock in the United States may be divided into 
two or more classes called first preferred, second preferred, etc. 
When, however, there is but one class of preference stock 
ahead of an ordinary stock in Great Britain the B or preferred 
stock is equivalent to second preferred stock in the United 
States. 

The term A stock is also occasionally used merely as a dis- 
tinction and not with the connotation of "deferred." For 
instance, it is sometimes, though rarely, used to distinguish 
one issue of a company's or government's debt from another. 
Costa Rica A bonds and Mexican National Railroad A bonds 
are examples of this use. 

At a discount. At less than the face value ; below par. 

A stock or bond is at a discount when it is selling below its 
par (face) value. For additional information see Par. 

At a premium. Above the face value ; above par. 

A stock or bond is at a premium when it is selling above 
its par (face) value. For additional information see Par. 

At call. The English term which means the same as the 
American term on call. Money at call (on call) is money 
loaned the return of which may be demanded by the lender at 
any time. 

Also, at call is an English term for money deposited with a 
bank or banker which may be withdrawn at any time. A 
lower rate of interest is allowed on money at call than on 
money at notice (money, notice of the intention to withdraw 
which must be given). 

At even. On the London Stock Exchange at even means 
that both bull (buyer) and bear (seller) are able to continue 
to the next settlement a bargain (contract) in a stock so 
quoted without charge for the accommodation. 



SMITH'S FINANCIAL DICTIONARY. 33 

Examples : Even to 1-16 contango means that the bull pays 
1-16 per cent while the bear carries over even. 1-16 back 
(backwardation) to even means that the bull carries over even 
while the bear has to pay 1-16 per cent. 

Atlantic ports. When this term is used with reference to 
export trade it means the four principal ports on the Atlantic 
coast — Boston, New York, Philadelphia and Baltimore. 

At notice. English term for money deposited with a bank 
or banker at interest which may be withdrawn only at (on) 
notice. A higher rate of interest is allowed on money at 
notice than on money at call (money which may be withdrawn 
at any time). 

At, or better. It is a frequent practise to give an order to 
buy a stock at, say, 100, or better, meaning a lower figure ; or 
to sell at, say, 100, or better, meaning a higher figure. 

At par. At the face value. For additional information 
see Par. 

Attachment. A writ authorizing the seizure by the sheriff 
of property belonging to the defendant in an action at law and 
to hold it to satisfy 3,ny judgment that the plaintiff may 
recover. 

An attachment is a provisional remedy. It is the exercise 
of judicial power to save a vigilant creditor from loss by tak- 
ing possession of property of the debtor and holding it to 
satisfy any judgment that may afterwards be obtained. It is 
usual to require from the creditor a bond in double the amount 
of the claim for the payment of any loss or damage sustained 
by the debtor should the attachment subsequently be vacated 
as illegal or improperly granted. The grounds ordinarily 
upon which an attachment are issued are non-residence, fraud 
or deceit in obtaining credit, or actual or contemplated re- 
moval of the person or property of the debtor from the juris- 
diction of the court. 

Attestation. The writing by a person of his name on an 
instrument to signify that it was executed in his presence or 
that it is correct. 

At the market. Buying or selling (as stocks) at current 
prices instead of at specified prices. 

At the opening. Buying or selling (as stocks) at opening 
prices — at prices prevailing at the opening or beginning of 



26 SMITH'S FINANCIAL DICTIONARY. 

business. Or, buying or selling at the opening of a company's 
transfer books after they have been closed for an election or 
for the payment of a dividend or for some other purpose. 

Sometimes a broker receives an order to sell a stock at 
the opening of the books, meaning at (on) the opening 
of the books of the company which issued it. The delay 
in the sale until that time may be because the stock has been 
assigned to a specified individual by the original owner instead 
of having been assigned (or signed) in blank (see Assigned in 
blank) and therefore not being a delivery it is necessary to 
wait until a new certificate can be obtained before a sale can 
be consummated. 

In the same way an order may be given to a broker to buy 
at the opening (of the books) because stock is unobtainable or 
obtainable with difficulty until that time or because the intend- 
ing buyer believes he can purchase to better advantage at the 
opening of the books than before. 

At three or at ten, twenty, thirty or sixty, etc. Bought or 
sold (as stocks) for delivery absolutely at the end of the num- 
ber of days specified without an option for an earlier delivery. 

Attorney. An attorney (that is, a private attorney or attor- 
ney in fact) is a person empowered by another to act in his 
stead, especially a person who is legally appointed and form- 
ally authorized to transact business for another. 

The distinction between a private attorney or attorney in 
fact and a public attorney or attorney at law is that the latter 
is qualified to prosecute and defend actions in a court of law, 
whereas the former is restricted to business out of court. 

Also see Power of attorney. 

At value. This is a term used in commercial dealings and 
particularly in transactions in dry goods. If a sale of goods 
for delivery in the next or an ensuing season is made at value 
instead of at a designated price it means that the price has 
not yet been fixed for the season in question and that the 
goods will be billed at the price ruling when shipment is made. 

Also, goods sold for the current season, but the prices of 
which are subject to change, often are sold at value, which 
means that they will be billed at the price ruling when ship- 
ment is made. 

Audit. An examination and adjustment of accounts by 



SMITH'S FINANCIAL DICTIONARY. 37 

comparing the charges with the vouchers, striking balances, 
etc. 

The purpose of an audit is to determine or demonstrate the 
correctness of accounts. An independent audit of the ac- 
counts of a company (as a railroad company) insures (or is 
intended to insure) to the stockholders and the general public 
the accuracy of the financial exhibits issued by the officers of 
the company. 

There are concerns which make a business of auditing ac- 
counts and which furnish a certificate and guaranty of the 
accuracy of their audits. 

Authorized clerk. One who is authorized by the committee 
for general purposes of the London Stock Exchange to trans- 
act business on the exchange for the member by whom he is 
employed. An unauthorized clerk, although admitted to the 
exchange, is an attendant only ; his presence is for the purpose 
of checking (making and comparing memoranda of) bargains 
(contracts) and for the purpose of "passing names" on the 
third day of the settlement. See Name day. 

Automatic currency. Another name for elastic currency; 
see Elastic currency. 

Available assets. Assets free to be converted into cash or 
to be otherwise employed ; that are not pledged or covered by 
lien. 

Aval. The written guarantee by a third person of the 
payment of a bill of exchange when due; guaranty; indorse- 
ment. 

Average book. In a book bearing this name in a bank is 
kept a record of the average credit balances of depositors. 
The book is intended to serve as a guide in making loans and 
in discounting paper for customers of the bank who ask ac- 
commodation from it. 

Averaging. A speculative term ; increasing purchases or 
sales, as of stocks, when the market is pursuing an adverse 
course, for the purpose of improving the position of the buyer 
or seller in the matter of price. 

Illustration : One hundred shares of stock are purchased at 
100 and the price declines to 98. At the last named figure 100 
shares more are purchased, which makes the average price for 
the 200 shares 99. Then, if a recovery to 99 takes place the 
operator is even ; if it extends to 100 he has a profit. 



38 SMITH'S FINANCIAL DICTIONARY. 

Again, lOO shares of stock are sold short at loo and the 
price advances to 102. At the last-named figure 100 shares 
more are sold, which makes the average price for the 200 
shares loi. Then if a reaction to loi takes place the operator 
is even ; if the reaction extends to 100 he has a profit. 

Averaging out. A speculative term, meaning to conclude a 
trade or venture, as in stocks, without loss and perhaps with 
a profit by the process of averaging ; see Averaging. 

Award. To assign or allot, as to award stock to a member 
of an underwriting syndicate. 

Also, an award is the decision given by an arbitrator in a 
matter (as a business transaction) which was referred to him 
for settlement. 



B 



B. As printed on the tape by the stock ticker this letter 
means bonds or class B or (when accompanied by figures) bid 
or buyer. 

A bid alone (without an offer) is followed by the letter B, 
thus : RG. 75. B, meaning that 75 was bid for Reading stock. A 
bid and offer are separated by @, thus: 75(0)1-2, meaning that 
75 was bid for the stock and that is was offered at 75 1-2. (On 
some tickers three dots . . . are used in place of @). A trans- 
action buyer 4, 10, 20, 30 or 60 is recorded (printed) thus: 
RG. 75. B4. (or 10, etc.), meaning that Reading stock sold at 
75 and that the buyer may on one day's notice to the seller 
call for the delivery of it at any time within 4 days (or 10 
days, etc.) ; see Buyer's option. 

Back. Abbreviation of backwardation ; see Backwardation. 

Backing. As applied to a bill of exchange or a promissory 
note backing means indorsement; see Indorsement. 

Back spread. A term used in an arbitrage operation in a 
commodity (grain, cotton or coffee, etc.) and also in a stock 



SMITH'S FINANCIAL DICTIONARY. 39 

when different prices prevail normally as well as from fluctua- 
tions for the same thing in different markets. 

The thing is bought in one market and simultaneously sold 
in another, to be subsequently sold where ilfe was bought and 
simultaneously bought where it was sold. 

In grain there is normally a difference in price between two 
markets equal to the cost of transporting the grain from the 
market where the lower price prevails to the market where the 
higher price prevails. To permit a back spread the difference 
in price between the two markets must be less than the normal 
difference. 

As an example of a back spread grain may be sold in Chi- 
cago and bought in New York if the price in New York is not 
sufficiently above the price in Chicago to equal the cost of 
transportation of the grain from New York to Chicago. 

The normal difference between Chicago and New York in 
the price of wheat is, say, 6 cents a bushel — that is, wheat is 
normally 6 cents a bushel lower in price in Chicago than in 
New York. Say a difference of 4 cents, or 2 cents less than 
the normal difference, is found to exist. The speculator buys 
in New York and sells in Chicago. If the Chicago price re- 
mains stationary while the New York price advances 2 cents 
the speculator sells in New York and makes 2 cents a bushel 
on the transaction there, while he sells in Chicago and neither 
gains nor loses on the transaction there. Or, if the Chicago 
price drops i cent and the New York price advances i cent he 
buys in Chicago and makes i cent a bushel on the transaction 
there and he sells in New York and makes i cent a bushel on 
the transaction there. 

A back spread is distinguished from a spread from the fact 
that in a back spread the difference in price between the two 
markets is less than the normal difference, whereas in a 
spread the difference in price between the two markets is 
greater than the normal difference ; see Spread. 

A back spread between Liverpool and New York or be- 
tween Liverpool and Chicago or between any market in one 
country and any market in any other country is effected in the 
same manner as a back spread between Chicago and New York. 

Likewise, a spread in cotton, coffee or any other commodity 
is effected in the same manner as in grain. 



40 SMITH'S FINANCIAL DICTIONARY. 

For information as to a back spread in an arbitrage opera- 
tion in a stock see Arbitrage. 

Backwardation. London Stock Exchange term, meaning the 
premium charged the seller when the bear seller (seller short) 
continues his bargain (contract) to the next fortnightly settle- 
ment. A backwardation is only charged on stocks that are 
oversold and are scarce for delivery. Generally the seller who 
continues receives a contango. The word backwardation is 
often abbreviated to back. 

Examples : i-8 to 1-4 back means that the bear (who is 
short) pays to the jobber 1-4 per cent for the accommodation 
and the bull (who is long) receives from the jobber 1-8 per 
cent. 1-8 back to 1-8 contango means that the bear pays 1-8 
per cent and the bull pays 1-8 per cent. 1-16 back to even 
means that the bear pays 1-16 per cent and the bull carries 
over at even, or in other words, pays nothing. 

Also, there is said to be backwardation in a security when it 
can be bought cheaper for the account (see For the account) 
than for money (see For cash) ; that is, it can be obtained at a 
lower price when the payment is to be made at the next settle- 
ment than if immediate cash payment is to be made. 

Bad debt. A debt on which interest is due and unpaid for 
six months, unless well secured and in process of collection, is 
a bad debt as defined by the National bank act. 

Bag. The jute bag in which coffee is imported contains 
about 200 pounds of Rio or 133 pounds of Java. 

Balance. The amount required to equalize the debtor and 
creditor sides of an account. 

For information as to buying and selling on balance in arbi- 
trage operations in stocks see On balance. 

Balance due. The unpaid difference between debts and 
credits in an account ; the amount owed by the debtor to the 
creditor after the total of credits has been deducted from the 
total of debits. 

Balance of trade. The difference in money value between 
sales and purchases ; in foreign trade the difference in money 
value between exports and imports. 

As commonly used the term balance of trade signifies the 
balance or difference in favor of a country, for instance, the 
United States as against the rest of the world; or in favor of 



SMITH'S FINANCIAL DICTIONARY. 41 

the rest of the world and against that country. To be exact 
the term balance of international trade should be employed, 
although it seldom is. 

Balances. See Clearing house balances ; also see Balance. 

Balance sheet. A statement in tabular form showing assets 
and liabilities, profit and loss. 

Balancing books. The periodical closing and adjustment 
of accounts in a ledger for the purpose of ascertaining profits 
or losses. 

Bale. A bale of cotton contains, as nearly as may be, 500 
pounds; a bale of hops contains, as nearly as may be, 180 
pounds. 

Ballooning. A stock market colloquialism, meaning to work 
a stock up far beyond its actual worth. 

Baltic ports. Baltic Sea ports from which most of the Rus- 
sian wheat was formerly exported. Russian wheat is now 
almost entirely shipped from Black Sea ports. 

Baltimore plan. The name applied to a plan presented at 
and approved by the convention of the American Bankers' 
Association in Baltimore in 1894, wherein it was proposed to 
repeal the requirement in the National bank act for the deposit 
of government bonds in the Treasury to secure circulation 
(national bank notes) ; to allow banks to issue notes to the 
extent of one-half their paid-up and unimpaired capital, these 
notes to be subject to an annual tax of 1-2 of i per cent; and 
to allow banks to issue ''emergency circulation" to the extent 
of 25 per cent additional, the additional circulation to be sub- 
ject to a heavier tax. A guarantee fund of 5 per cent was to 
be established by the banks to be held by the Treasury for 
the redemption of notes, and circulation was to be a first li«n 
upon the assets and upon the liability of stockholders of banks, 
which liability is for an amount equal to and in addition to the 
par value of the stock owned by stockholders. 

Banging the market. London Stock Exchange term for 
forcing down the market by heavy sales. 

Bank. A bank is an institution for lending, borrowing, is- 
suing or caring for money. It may be either incorporated or 
private. The New York State law thus defines bank : "Any 
moneyed corporation authorized by law to issue bills, or notes, 
or other evidences of debt for circulation as money, or to 



42 SMITH'S FINANCIAL DICTIONARY. 

receive deposits of money, and commercial paper, and to make 
loans thereon; and to discount bills, notes, or other commer- 
cial paper, and to buy and sell gold and silver bullion or for- 
eign coins, or bills of exchange." 

There are five kinds of banks in the United States — national 
bank, state bank, trust company, savings bank, individual 
banker (or private bank). 

The National bank act provides for the incorporation of na- 
tional banks. This act permits such banks to include as 
part of their title the word "national" and prohibits all other 
banks from using the word ''national" as part of their name. 
In the District of Columbia savings banks necessarily exist 
under authorization of the National bank act. State banks are 
organized under the laws of the states in which they are situ- 
ated. Trust companies and savings banks are also organized 
under state laws. Private banks or bankers (that is, one or 
more persons engaged in the business of banking but not in- 
corporated as a company) are not subject to supervision by 
national or state authorities except when they issue circula- 
ting notes (which they are permitted to do under the laws of 
New York state on the same conditions imposed on state 
banks, but which they have found unprofitable on account of 
the Federal tax of lo per cent on all note issues but those of 
national banks). 

When a person keeps an account with a bank he is said to 
bank at that bank. 

Bankable bill. The term usually employed is bank bill ; see 
Bank bill. 

Bankable paper. The term usually employed is bank paper ; 
see Bank paper. 

Bank account. An account kept with a bank which may be 
drawn against until the credit balance is exhausted. 

Bank act. The name given to the special act under which 
the Bank of England exists. The earlier charters of the bank 
were for terminable periods ; the present charter, conferred by 
the Bank act, so-called, in 1844, continues for an indefinite 
period. 

The Bank act limits the circulation (notes) that may be 
issued by the Bank of England against (or be backed by) 
securities alone. In times of crisis when the scarcitv of cir- 



SMITH'S FINANCIAL DICTIONARY. 43 

culating medium causes panic the bank is allowed by Parlia- 
ment to increase the amount of the notes that it may issue 
against securities. This is done by suspension of the Bank 
act. The suspension is permitted by a ''Letter of license" 
from the government of the day, which promises that the gov- 
ernment will propose a bill of indemnity if the legal limit is ex- 
ceeded. The Bank act was last suspended in 1866. 

For the provisions of the act under which the national banks 
in the United States are created and operate see National bank 
act. 

Bank balance. This term may be applied either to the bal- 
ance against or in favor of a bank at the clearing house or to 
the balance standing to the credit of an individual, firm or 
corporation in a bank. 

Bank bill. This term is an abbreviation of bankable bill; 
it means a bill of exchange or draft that, is of such good quality 
that a bank will readily discount (buy) it. Accordingly, it 
also applies to a bill when it bears the indorsement of a bank. 
The visual manner in which a bank becomes an indorser of a 
bill is in selling a bill w^hich it holds instead of retaining it 
until maturity. The reason for selling is that the bank desires 
cash or that it can make a satisfactory profit by disposing of it. 
The bill brings a better price (the discount is less) with the 
bank's indorsement than it would bring without the bank's 
indorsement. 

The term bank bill or bank's bill also applies to a bill of ex- 
change or draft issued by a bank and pa3'able by a corre- 
spondent of the bank. 

The term bank bill also is often used in place of bank note 
(money). 

Bank book. The book held by a depositor in a bank in 
which are entered the sums placed to his credit and, when a 
balance is struck at intervals, the amount of the debits. 

Bank check. A written order for the payment of money on 
deposit in a bank, usually executed by filling in and signing a 
printed or engraved blank form prepared for the purpose. For 
additional information see Check. 

Bank clearings. Same as bank exchanges : the items 
(checks, drafts, etc.) presented by banks at the clearing house 
for collection. It is not correct to sav bank clearances ; clear- 



44 SMITH'S FINANCIAL DICTIONARY. 

ings is the word that should be employed. For additional in- 
formation see Clearing house of the associated banks of New 
York. 

Bank credit. A credit with a bank, usually established by 
depositing security, on which money may be drawn by check 
tip to an agreed amount. 

Bank director. A director of a national bank or of a state 
bank. The title of the corresponding officer of a savings bank 
is trustee. It is a common practise to speak of a director of 
a trust company as a bank director. 

The directors of a bank, like other agents, are bound to use 
reasonable care and diligence in protecting the interests con- 
fided to them. For a loss which is suffered despite such care 
they are not liable; but for any loss caused by negligence they 
are liable. Also see Director. 

Bank draft. A draft or bill of exchange issued by a bank 
and payable by another bank. 

Banked. Sometimes when money (or its equivalent, as 
checks and drafts) has been deposited in bank it is said to have 
been banked. 

Banker. A banker has been defined as a person who takes 
•care of other people's money and lets them have it when they 
want it. The distinct function of the banker begins when he 
uses the money of others ; as long as he uses his own money he 
is a capitalist. 

The term banker is greatly misused. Stock brokers, dealers 
in exchange and commercial paper, note shavers, money lend- 
ers and money changers often describe themselves as bankers. 
As a fact they are not bankers. Syndicate managers also often 
describe themselves as bankers ; they are financiers perhaps, 
but not bankers. 

Banker's bill. A bill or exchange or draft drawn and sold 
by a banker and payable by another banker. 

Banker's draft. A draft or bill of exchange issued by a 
banker and payable by another banker. 

Banker's exchange. Exchange (draft) on a banker ; that is, 
exchange sold by one banker and payable by another banker. 

Banker's note. A promissory note issued by a private 
banker for circulation as a substitute for money. 

Bank examiner. A bank examiner in New York state is ap- 



SMITH'S FINANCIAL DICTIONARY. 43 

pointed by the Superintendent of the Banking Department, 
who has practically the same power over state banks that the 
Comptroller of the Currency has over national banks. The 
law says that an examiner shall ''examine fully into the books, 
papers, and affairs of the corporation, or individual banker 
specified in his appointment, and report on oath to the super- 
intendent the result of such examination. No such examiner 
shall be appointed receiver of any corporation or individual 
banker whose affairs he shall have examined pursuant to such 
appointment." 

Also see National bank examiner. 

Bank exchange. Exchange (bills of exchange — drafts) is- 
sued and sold by a bank and payable by another bank. 

Bank exchanges. Same as bank clearings ; the items 
(checks, drafts, etc.) presented at the clearing house for col- 
lection. 

For additional information see Clearing house of the asso- 
ciated banks of New York. 

Bank holiday. A secular day on which banks in Great Brit- 
ain and Ireland are legally closed. 

In Great Britain (excepting Scotland) and Ireland the legal 
or bank holidays are Easter Monday, Whit-Monday, the first 
}^Ionday in August, and December 26 (Boxing day) ; and 
the banks are also closed as a matter of course on Christmas 
day and Good Friday. In Scotland the bank holidays are New 
Year's day, Christmas (if either falls on a Sunday, then the fol- 
lowing day is a holiday). Good Friday and the first Mondays 
in May and August. 

Banking. Banking is a business which seems to be as old 
as civilization. Money lenders and the payment of usury are 
mentioned in the Bible and in other ancient literature, but 
banking in its modern acceptation is by many believed to be an 
evolution that has been the natural outgrowth of industrial 
development and the establishment of civic order. 

Not many centuries ago each man was in a large degree his 
own defender and protector. To narrow the illustration to 
London, for instance : To travel in safety in the streets of that 
city after nightfall It was necessary to go armed and In com- 
pany. The carrying of valuables was an extra invitation to 
attack. Goldsmiths, who of necessity had to keep on hand 



46 - SMITH'S FINANCIAL DICTIONARY. 

large stocks of the precious metals, took special precautions 
for the safe keeping of their property and people acquired the 
habit of depositing money with them, paying for the privilege 
in order to secure the increased protection. 

Gradually the goldsmiths learned that all the people who 
had so deposited money did not call for it at once and 
they began to lend out the surplus on their own authority. 
They found also that if a man wanted to discharge a debt he 
found it more convenient to give his creditor an order for the 
money on deposit than to come in person and carry away the 
gold, imposing upon the creditor the necessity of returning the 
gold for deposit in his name. 

Thus, the system of a transfer of credits by means of checks 
grew up. It was not only safer, but more convenient. In 
making loans, likewise, the goldsmith, now become a banker, 
learned merely to put the loan on his books as a credit to the 
borrower, against which the latter could draw his order or 
check precisely as if he had deposited the actual money; or 
the goldsmith gave his own note or promise to pay to the 
borrower. The latter passed it on and it became a circulating 
medium wherever the credit of the goldsmith was good. 

Modern banking is simply a development of this system. 
The function of a modern bank is to accept for safe keeping 
and make legitimate use of the money of its customers. This 
money and its own paid-in capital it makes the basis of loans, 
on which it charges interest in accordance with the laws under 
which it is chartered. These loans may take the form of actual 
money, but as a rule they are merely credits against which the 
borrower is privileged to draw. They are entered on the 
books of the banks as "deposits." In practise these "loans" 
and "deposits" have been found so nearly to counterbalance 
each other that only a small percentage of actual money is 
required to transact the larger afifairs of business. 

In retail transactions, for the payment of employees, and in 
small daily affairs of life actual money is used, but for all other 
business the transfer of credits by means of bank checks and 
bills of exchange is the universal rule. In other words, banks 
have become the principal mechanism of exchange. To what 
an extent bank checks have supplemented actual money as a 
medium of exchange, thus making possible the wonderful busi- 



SMITH'S FINANCIAL DICTIONARY. 47 

ness activity of the present day^ can best be judged by study- 
ing the figures of the operations of the various clearing houses 
and the relation which the actual money in the vaults of the 
banks bears to the total transactions recorded. 

In addition to acting as depositories for money and nego- 
tiators of credits many banks exercise the function of note 
issuing. Under the national banking law any national bank 
may issue notes up to the amount of its paid-in capital upon 
depositing with the Treasurer of the United States authorized 
bonds of the United States equal in par value to the amount 
of circulating notes so issued. State banks are also authorized 
to issue notes, but the Federal tax of 10 per cent on state bank 
circulation acts as an effective prohibition on the exercise of 
the right. 

Various plans for liberalizing the laws relating to note issues 
Avill be found under the titles Asset currency and Elastic 
currency. 

The term banking is greatly misused. Stock brokers, dealers 
in exchange and commercial paper, note shavers, money lend- 
ers and money changers often describe themselves as engaged 
in banking and dignify their offices with the title banking 
houses. As a fact they are not engaged in banking and their 
offices are not banking houses. Syndicate managers also often 
describe their operations as banking; their operations are 
financing or financiering perhaps, but not banking. 

Banking power. The banking power of a country or a com- 
munity consists of the capital and deposits of its banks added 
together. 

Bank note. A promissory note payable to bearer on de- 
mand issued by a bank under authority of law as a circula- 
ting medium. 

Bank of deposit. A bank that receives deposits of money 
and pays out money on checks drawn against the deposits. For 
additional information see Bank. 

Bank of discount. A bank which discounts (see Discount) 
promissory notes and bills of exchange. Savings banks are 
not banks of discount, but all national and state banks are. 

Bank of England. The custodian of the public money of 
Great Britain and manager of the public debt. It is the g^reat- 



48 SMITH'S FINANCIAL DICTIONARY. 

est monetary institution in the world, a distinction which 
formerly belonged to the Bank of Amsterdam. The Bank of 
England was incorporated in 1694 and began business January 
I, 1695. Its official title is "The Governor and Company of 
the Bank of England." In Great Britain it is often called the 
''central institution." 

The Bank of England conducts the banking business of the 
government; it receives the revenues of the government and 
makes disbursements for it, and it also issues exchequer and 
treasury bills and advances money to the government. It is 
also the London banks' bank; that is to say, the other banks 
keep on their own premises only enough of their cash for the 
requirements of their business and deposit the remainder with 
the Bank of England. The strength of the Bank of England's 
position is thus due to the fact that it is the bank not only of 
the British government but also of the other London banks 
and so of the whole of the London money market. 

Bank of England note. A circulating note (money) issued 
by the Bank of England, which performs the chief note-issuing 
function in the United Kingdom. 

Eventually the bank will possess the monopoly of note issue 
in England and Wales. It is permitted to issue a certain 
amount of notes upon government securities and it has the 
privilege of issuing, also on government securities, an amount 
equal to two-thirds of the issues of other banks in England and 
Wales when these go out of existence or surrender their circu- 
lation. The Bank of England may issue notes to any further 
amount it sees fit by providing and setting aside as backing 
for them an equal amount of gold coin or bullion. One-fifth of 
the coin or bullion held as backing for its notes may be 
silver coin or bullion, but as a fact silver is not used by the 
bank for this purpose. Silver cannot legally be tendered by 
the bank for the redemption of its notes. 

In times of crisis when the scarcity of circulating medium 
causes panic the bank is allowed by Parliament to increase the 
number of the notes that it may issue against securities. This 
is done by the suspension of the Bank act, which limited the 
amount of the bank's circulation of notes backed only by 
securities. The suspension is permitted by a "Letter of 
license" from the government of the day, which promises that 



SMITH'S FINANCIAL DICTIONARY. 49 

the government will propose a bill of indemnity if the legal 
limit is exceeded. The Bank act was last suspended in 1866. 

The bank's notes are legal tender in England and Wales, 
but are not legal tender in payments by the bank itself. The 
holders of the bank's notes are entitled to demand gold for 
them on presentation at the bank. 

The notes of the Bank of Ireland are legal tender in Ireland. 
The notes of the other English, Irish and Scotch banks are not 
legal tender, but they constitute an important circulating me- 
dium. 

For many years the lowest Bank of England note was £20. 
In 1759 £10 ^^d £^5 notes were issued; in 1793 the first £5 
note made its appearance; in 1797 £1 and £2 notes were is- 
sued, but the issue of these last has ceased and now the small- 
est denomination is £5. The largest denomination issued is 
£ 1 ,000. 

For additional information see Bank of England return. 

Bank of England post-bill. What in Great Britain is desig- 
nated as a bank post-bill is a promissory note (for an amount 
not less than £10) issued by the Bank of England, undertak- 
ing at so many (usually seven) days' sight to pay such "sole 
bill of exchange" to an assigned person or order. Not being 
payable on demand there is an interval in which payment of it 
may be stopped and the money saved in case the bill is lost or 
stolen. 

Bank of England rate. The minimum rate of discount of the 
Bank of England. 

The rate is nominally the rate at which the Bank of England 
itself will discount best three months' bills. It is in fact the 
official standard of discount. It is often called the ''official 
minimum," for it is the minimum rate of the bank which is the 
official bank — the government's bank. 

The rate has a direct relation to the movement of gold to and 
from London. For instance, the raising of the rate raises the 
value of money and is calculated to attract gold from foreign 
centres where the value of money is, for the time being at least, 
less. The directors of the bank often insure the effectiveness 
of the rate by borrowing in the money market, thus denud- 
ing it of supplies. As the raising of the bank's rate raises the 



50 SMITH'S FINANCIAL DICTIONARY. 



value of money so the lowering of it lowers the value of money. 

Late every afternoon the bank issues a statement showing 
the amount of gold withdrawn from its supply for foreign 
shipment or received by it from abroad during the day and 
generally telling whither it has been sent or whence it has 
come. 

Bank of England reserve. This does not figure by name in 
the weekly return (statement) of the bank, which is issued on 
Thursday and shows the condition of the bank at the close of 
business the day before. It is represented by two items in 
the report of the banking department (there is also an issue de- 
partment), "jNotes" and ''Gold and silver coin." 

The reserve consists of all the notes the bank has in its 
"till" and all the gold and silver coin it holds after it has set 
aside the amount of gold coin and bullion required as backing 
for the notes it has issued in excess of the "authorized issue." 
The "authorized note issue" of the bank is backed by a perma- 
nent debt of the government to the bank, designated in the 
return as "government debt," and by "other securities." Any 
issue in excess of the "authorized note issue" has to be backed 
by setting aside gold coin and bullion which the bank holds. 

If the reserve is low and gold is going abroad the bank di- 
rectors are likely to raise the bank's discount rate; if the re- 
serve is high (large) and gold is coming in or showing no sign 
of going out the directors are likely to lower the rate. 

There is a permanent reserve fund designated as the "rest." 
This fund represents the accumulated profit of the bank and 
is never allowed to fall below £3,000,000. The surplus over 
£3,000,000 at the end of each half-year is treated by the di- 
rectors as the amount available for a dividend to the pro- 
prietors (stockholders) of the bank. 

The Bank of England does not allow interest on deposits, 
partly for the reason that if it were to allow interest it would 
be obliged to employ its resources to a larger extent ; thus the 
proportion between its reserve and its liabilities- would be 
lowered and thereby its strength would be impaired. The 
average reserve maintained by the bank is 43 per cent — that is, 
its average holdings in its banking department of its own notes 
and gold and silver coin are equal to 43 per cent of its "public 



SMITH'S FINANCIAL DICTIONARY. 51 

deposits" and '•other deposits'' combined. The reserve is 
seldom allowed to fall below 30 per cent, while it sometimes 
rises above 50 per cent. 

Bank of England rest. The rest is the accumulated profit 
or surplus of the Bank of England. It is never allowed to fall 
below £3,000,000. The dividend which is declared half-yearly- 
is declared only out of the amount of the rest in excess of 
£3,000,006. 

Bank of England return. This is published every Thurs- 
day and shows the condition of the bank at the close of busi- 
ness the day before. 

It is divided into two parts, one headed 'Tssue depart- 
ment" and the other headed ''Banking department." Under 
the heading "Issue department" there is only one debit item — 
"Notes issued." There are three credit items — "Government 
debt," "Other securities" and "Gold coin and bullion." "Notes 
issued" means the circulating notes (paper money) issued by 
the issue department of the bank. "Government debt" means 
a permanent debt of the government to the bank which the 
bank is allowed to count as backing (security) for part of the 
notes included in the so-called "authorized issue." "Other 
securities" means securities provided as backing for the re- 
mainder of the notes included in the authorized issue. "Gold 
coin and bullion" means gold coin and bullion set aside from 
the bank's holdings as backing for notes issued in excess of the 
authorized issue. The three credit items combined represent 
the total backing for notes issued by the bank. The bank has 
the right to issue notes in excess of the authorized issue to any 
amount so long as it provides backing in the shape of gold coir 
and bullion. 

Under the heading "Banking department" the debit items 
are : "Proprietors' capital" (the capital stock of the bank) ; 
"Rest" (the accumulated profit of the bank) ; "Public deposits" 
(the amount of money belonging to the government on deposit 
with the bank) ; "Other deposits" (money ( '/^eposit with the 
bank other than that belonging to the go^ / vument) ; "Seven 
days' and other bills" (promissory notes issiVed by the bank — 
see Bank of England post-bill). The credit "items under the 
heading "Banking department" are : "Government securities" 
(government securities owned by the bank) ; "Other securi- 



\ 



52 



SMITH'S FINANCIAL DICTIONARY. 



ties" (the bank's other investments, whether in securities, bills 
of exchange or advances to its customers and to the market 
in general) ; "Notes" (bank notes in the "till" of the bank) ; 
"Gold and silver coin" (gold and silver coin in the "till" of the 
bank). 

The Bank of England return represents the condition of all 
the banks in London to practically the same extent that the 
weekly statement of the associated banks represents the condi- 
tion of all the banks in New York. 

The debit item "Other deposits" in the Bank of England's 
return represents not only the money deposited by people who 
bank directly with the Bank of England (which by the way is 
a comparatively insignificant amount), but also the money 
deposited by people in the other banks, for these banks in turn 
deposit the money with the Bank of England, which is the 
banks' bank. Thus, the item "Other deposits" represents, or 
rather reflects, the available supply of cash in the London 
money market. The credit item "Other securities" includes 
the indebtedness of the money market to the bank. It corre- 
sponds in a way to the item "Loans" in the weekly statement 
of the associated banks of New York for the reason that it 
represents the bank's advances as well as its investments in 
securities. 

Following is the form in which the Bank of England return 
is made up : 

Issue Department. 



Notes issued 50,824,615 



50,824,615 



Government debt 11,015,100 

Other securities 6,759,900 

Gold coin and bullion 33,049,615 



50,824.615 



Banking Department. 



Proprietors' capital . .> 14,553,000 

Rest ^. . . . 3,134,565 

Public deposits / 9,124,658 

Other deposits (. 40,007,739 

Seven days' and othe 'bills 184,840 

r 

, 67,004,802 



Government securities. . . . 17,015,083 

Other securities -5,833,973 

Notes 21,347,245 

Gold and silver coin 2,298,501 



67,004,802 



SMITH'S FINANCIAL DICTIONARY. 53 

Bank of England statement. See Bank of England return, 
which is the correct term. 

Bank of France. An institution in Paris corresponding to 
the Bank of England in London. 

The present Bank of France was established by the First 
Napoleon and began business on February 20, 1800. The gov- 
ernor of the bank is appointed for life and there is a general 
council of regents. The bank is a private institution, its 
shares being held by individuals, but it is under control of the 
state (government). 

The bank has the sole privilege of issuing notes. The issu- 
ance of notes is made by direction of the council of regents, 
which reports to and is accountable to the government. The 
notes have no other security than the general assets of the 
bank, but the government sustains the bank when necessary 
with its credit. The bank protects its gold reserve by charg- 
ing a premium on gold, when the metal is demanded for export. 

Bank of Germany. See Imperial Bank of Germany, which 
is the official name. 

Bank of issue. A bank that has the right to issue its notes 
for circulation as money. For additional information see 
Bank. 

Bank of North America. The Bank of North America in 
Philadelphia is the oldest existing bank in the United States. 
The Continental Congress of the thirteen original states 
granted but one bank charter, and it was a perpetual one, to 
the Bank of North America. The claim is made on behalf of 
the bank that this charter is still in force, although the bank 
now conducts business under the National currency act of Feb- 
ruary 20, 1863, the title of which was changed on June 20, 1874, 
to National bank act. 

The bank began business under its original charter January 
7, 1782. On March 26, 1^82, the bank obtained a perpetual 
charter from the state of Pennsylvania and conducted its 
affairs under this second charter until it was repealed by 
the legislature three years later. Then its operations 
were continued under its original charter. A new but not per- 
petual charter was obtained from the state of Pennsylvania in 
1787 and under this charter, which was renewed from time to 
time, the bank did business until December 3, 1864, when it 



54 SMITH'S FINANCIAL DICTIONARY. 

became a national banking association under the provisions of 
the National currency act. 

Bank of the United States. There were two institutions 
bearing this title that acted as fiscal agents of the United States 
government. 

The first Bank of the United States was chartered by Con- 
gress in 1791 and went into liquidation on the expiration of 
its charter in 181 1. The second Bank of the United States 
was chartered by Congress in 1816; on the expiration of its 
national charter in 1836 it was rechartered by the legislature 
of Pennsylvania as the United States Bank of Pennsylvania 
and went into liquidation in 1841. 

Also see Fiscal Bank of the United States. 

Bank paper. This term is an abbreviation of bankable 
paper; it means commercial paper (acceptances, or in other 
words, bills of exchange or drafts which have been accepted 
and promissory notes) that is of such good quality that a bank 
will readily discount (buy) it. Accordingly, it also applies to 
commercial paper when the paper bears the indorsement of a 
bank. The usual manner in which a bank becomes the in- 
dorser of commercial paper is in rediscounting. First it buys 
(discounts) the paper and then it sells (rediscounts) it if it 
desires cash or if it can make a satisfactory profit by a sale. 
The paper brings a better price (the discount is less) with the 
bank's indorsement than it would bring without the bank's 
indorsement. 

Bank post-bill. See Bank of England post-bill. 

Bank rate. This term is generally applied to a discount rate 
in a foreign financial centre. In London it means the discount 
rate of the Bank of England, whereas the open market rate 
means the rate of other banks and bankers and bill brokers 
(dealers in bank and commercial paper). In Paris the bank 
rate is the rate of the Bank of France ; in Berlin the bank rate 
is the rate of the Imperial Bank of Germany, and so on. In 
New York the term bank rate is used to distinguish the uni- 
form rate made by the banks from the varying rates made by 
other lenders. 

In London when the Bank of England makes a rate the other 
lenders adopt it if possible or sometimes even quote a higher 
rate, but if they find they cannot do business at it they make 



SMITH'S FINANCIAL DICTIONARY. 55 

a lower rate, and so it is in Paris, Berlin, etc. In New York 
if other lenders cannot do business at the rate adopted by the 
banks they make a lower one. 

Bank reserve. The reserve of a bank is the amount of law- 
ful money it holds against deposits. 

The places in which national banks are situated are divided 
into three classes — places which are not reserve cities, reserve 
cities and central reserve cities. Places which are not reserve 
cities comprise the greater number of places, national banks in 
which are required to m.aintain a reserve of (keep on hand) 
15 per cent of the amount of deposits with them, three-fifths 
of which reserve, however, may be deposited by them in banks 
in reserve or central reserve cities. National banks in places 
which are not reserve cities are unofficially designated as 
country banks. 

Reserve cities are Albany, Baltimore, Boston, Brooklyn, 
Cincinnati, Cleveland, Columbus, Denver, Des Moines, De- 
troit, Houston, Indianapolis, Kansas City, Kan., Kansas City, 
Mo., Lincoln, Los Angeles, Louisville, Milwaukee, Minne-/ 
apolis. New Orleans, Omaha, Philadelphia, Pittsburg, Port- 
land, Ore., St. Joseph, St. Paul, San Francisco, Savannah, 
Washington. National banks in these cities must keep on 
hand 25 per cent of the amount on deposit, one-half of which 
may be deposited in central reserve banks. 

Central reserve cities are Chicago, New York, St. Louis. 
National banks in these cities must keep on hand 25 per cent 
of their deposits. 

In 1902 the Secretary of the Treasury (Leslie M. Shaw) sus- 
pended the requirement to keep a reserve against government 
funds on deposit in national banks upon the ground that these 
funds were special deposits which were fully secured by pledge 
of bonds with the Treasurer of the United States. 

A state bank in New York state is required in a city of more 
than 800,000 inhabitants to keep a reserve of 15 per cent and 
in a place of less than 800,000 inhabitants it is required to keep 
a reserve of 10 per cent. This is called in the.law "lawful money 
reserve." The requirement is the same in the case of a private 
bank or banker operating under the supervision of the banking 
department. One-half of the reserve may be deposited sub- 
ject to call with any bank or trust company having a capital of 



56 SMITH'S FINANCIAL DICTIONARY. 

not less than $200,000 and approved by the superintendent of 
banking as a depository. 

A trust company is not required to keep a reserve. The 
New York state law requires, however, that the capital of the 
company shall be invested in bonds and mortgages on unen- 
cumbered real property (real estate) in the state worth at least 
double the amount loaned thereon or in the stocks or bonds 
of the state or of the United States or of any county or in- 
corporated city of the state duly authorized by law to be 
issued. 

A savings bank ifi New York state is not required to keep a 
reserve, the object of a savings bank being profitably to employ 
as fully as possible the funds entrusted to it. It may, however, 
keep on hand a fund not exceeding 10 per cent of its deposits. 
A savings bank is subject to many restrictions as to the char- 
acter of its investments and the collateral on which it may 
loan. 

For information as to the reserve of the Bank of England 
see Bank of England reserve. 

Bank runner. The name applied to a messenger employed 
by a bank. 

Bankruptcy. The state of being bankrupt or insolvent; in- 
ability to meet obligations. 

A debtor in financial difficulties is privileged to make all rea- 
sonable efforts to extricate himself and to this end he may 
execute a mortgage or give any other lien to one furnishing 
him money at the time and this mortgage or lien will be sus- 
tained though the debtor should be declared a bankrupt within 
four months thereafter. The secured creditor must first ex- 
haust his security and then he can come in only for a pro-rata 
share upon the amount left unpaid. 

A payment of money by an insolvent within four months of 
his actual bankruptcy creates a preference like the delivery of 
any other property by the debtor to his creditor. The creditor 
thus preferred if he knew at the time of payment or had rea- 
sonable cause to believe that it was paid to him by preference 
can be compelled to return the money to the trustee in bank- 
ruptcy. If, however, he did not know or have reasonable 
ground for believing that he was being made a preferred cred- 
itor he cannot be compelled to return the money. But in such 



SMITH'S FINANCIAL DICTIONARY. 5; 

a case he cannot collect any dividend upon any remainder of his 
debt unless he does return what he has received. He may re- 
tain what he has and waive all claim to the balance or he may 
return what he has received and be included among the other 
creditors for a dividend upon the whole of his debt. 

When an insolvent has been discharged in bankruptcy any 
real estate or personal property to which he may take title 
thereafter is free from claims existing against him prior to the 
bankruptcy proceedings whether those claims had been re- 
duced to judgments or not. The intent of the law is that a 
debtor shall surrender whatever property he has to be dis- 
tributed among his creditors and that he shall thereby be freed 
from further liability for those particular debts. 

A law of any state which conflicts with the national bank- 
ruptcy law is to that extent invalid. 

Bank's bill or banker's bill. A bill of exchange (draft) 
issued by a bank or banker. 

Bank statement. A statement or exhibit of the condition 
of banks. 

In New York the bank statement is issued from the clearing 
house on Saturday. The consolidated statement (or as it is 
officially designated, the "summary of the weekly statement of 
the associated banks'') is the collective showing by the banks 
belonging to the clearing house — the showing when the re- 
turns of the individual banks have been consolidated (put to- 
gether). 

The consolidated bank statement shows the average de- 
posits, loans, specie, legal tenders, circulation, reserve and 
surplus reserve of the banks for the week ending with and in- 
cluding Friday. 

The term deposits includes the net deposits (credit balances) 
of persons and concerns (designated as individual deposits), 
balances to the credit of other banks and all money and credits 
subject to withdrawal. Loans include money loaned and like- 
wise paper (promissory notes, drafts, etc.) bought. Specie in- 
cludes not only gold and silver coins, but also gold certificates 
and silver certificates, which are redeemable in gold or silver, 
as the case may be. Legal tenders as the term is used in the 
bank statement means United States notes (greenbacks) and 



58 SMITH'S FINANCIAL DICTIONARY. 

Treasury notes (notes issued for silver bullion purchased under 
the so-called Sherman act). 

Note. — As defined by the statutes legal tenders include United States 
notes, Treasury notes, gold and silver coins and minor coins, but not gold 
certificates, nor silver certificates ; see Legal tender. 

Circulation means the notes issued by national banks, to 
secure the redemption of which government bonds have to be 
purchased by the banks and deposited with the Treasurer of 
the United States. A bank cannot count circulation in its 
reserve ; whether it is its own circulation or the circulation of 
some other bank makes no difference. Reserve means the 
total amount of specie and legal tenders held. Surplus reserve 
means the amount of money held in excess of legal require- 
ment. A national bank (in New York city) must, by law, 
maintain a reserve equal to 25 per cent of its deposits ; a state 
bank must, by Islw, maintain a reserve of 15 per cent. In com- 
piling the bank statement a reserve of 25 per cent is allowed 
or figured for state banks as well as for national banks. 

The consolidated statement formerly was issued from the 
clearing house in the following form, the changes (increases 
and decreases) resulting from comparison with the preceding 
statement (the statement issued the week before) : 

Loans $874,647,900 $2,344,000 Increase, 

Specie 152,338,200 1,068,300 Increase. 

Legal tenders 67,274,300 1,319,000 Decrease. 

Deposits 872,340,600 164,600 Increase. 

Circulation 36,072,500 411,600 Increase. 

Decrease of reserve $291,850. 

The (final) item reserve in the statement as issued from the 
clearing house meant surplus reserve, although not specifically 
so stated. 

In the newspapers the statement appeared as follows, being 

elucidated so as to show the reserve held (that is, specie and 

legal tenders, which are generally referred to as cash holdings), 

the reserve required and the svirplus reserve, with the changes 

in these items : 

Current week. Preceding week. Changes. 

Loans $874,647,900 $872,303,700 Inc .$2,344,200 

Deposits 872,340,600 872,176.000 Inc. 164,600 

Circulation 36,072,500 35,660,900 Inc . 411,400 

Legal tenders 67,274,300 68,593,300 Dec. 1,319,000 

Specie 152,338,200 151,269,900 Inc . 1,068,300 

Reserve held $219,612,500 $219,863,200 Dec. $250,700 

Reserve required 218,085,150 218,044,000 Inc. 41,150 

Surnlus $1,527,350 $1,819,200 Dec. $291,850 



SMITH'S FINANCIAL DICTIONARY. 59 



In 1902 the Secretary of the Treasury (LesHe M. Shaw) sus- 
pended the requirement to keep a reserve against government 
funds on deposit in national banks upon the ground that these 
funds were special deposits which were fully secured by pledge 
of bonds with the Treasurer of the United States. This action 
by the Secretary of the Treasury caused a change in the 
make up of the bank statement by the addition to it of figures 
showing the average amount of government funds on deposit. 
The consolidated statement was thereafter issued from the 
clearing house in the following form : 

Loans $874,647,900 $2,344,200 Increase. 

Specie 152,338,200 1,068,300 Increase. 

Legal tenders- 67,274,300 1,319,000 Decrease. 

*Deposits 872,340,600 164,600 Increase. 

Circulation 36,072,500 411,600 Increase. 

Reserve on all deposits 291,850 Decrease. 

Reserve on deposits, other than 

United States 325,825 Decrease. 

* United States deposits included, $40,633,400. 

In the newspapers the statement was made up in both the 
old and the new forms as follows : 

Current week. Preceding week. Changes. 

Loans $874,647,900 $872,303,700 Inc .$2,344,200 

Deposits 872,340,600 872,176,000 Inc . 164,600 

Circulation 36,072,500 35,660,900 Inc . 411,400 

Legal tenders 67,274,^00 68,593,300 Dec. 1,319,000 

Specie 152,338,200 151,269,900 Inc, 1,068,300 

Reserve held $219,612,500 $219,863,200 Dec. $250,700 

Reserve required 218,085,150 218,044,000 Inc . 41,150 

Surplus $1,527,350 $1,819,200 Dec. $291,850 

Deducting the United States deposits held by the banks from the 
aggregate deposits the bank statement compares as follows 

Current week. Preceding week. Changes. 

Total deposits $872,340,600 $872,176,000 Inc . $i6a,6oo 

United States deposits .. 40,633,400 40,769,300 Dec. 135,900 

Deposits 25 per cent. . .$831,707,200 $831,406,700 Inc. $300,500 

Reserve held 219,612,500 219,863,200 Dec. 250,700 

Reserve required 207,926,800 207,851,675 Inc . 75,125 

Surplus $11,685,700 $12,011,525 Dec, $325,825 

The detailed bank statement, which is issued simultaneously 
with the consolidated statement, contains first the number of 
each bank (each bank has a number by which it is known at 
the clearing house) and then the name of the bank, after which 
follow the amounts of its capital, net profits (surplus and un- 
divided profits), specie, legal tenders, deposits and circulation. 



6o SMITH'S FINANCIAL DICTIONARY. 

The bank statement is said to have been made up on rising 
averages when the items in it have been increasing in amount 
during the week ; or the statement is said to have been made up 
on falhng averages when the items in it have been decreasing 
in amount during the week. 

Generally speaking the bank statement is favorable or 
good when it shows that the position of the banks has been 
strengthened, as by an increase in the surplus reserve through 
or by means of an increase in their cash holdings rather than 
by a decrease in their deposits, which often is effected by the 
calling of loans — by demanding and obtaining the payment of 
money loaned on call. As money loaned is credited to bor- 
rowers on their deposit accounts and increases the total de- 
posits of the banks so the payment of loans by borrowers 
takes from and decreases deposits. As will be seen the calling 
and consequent payment of loans does not increase cash hold- 
ings but merely changes balances in individual accounts. A 
reduction in deposits reduces the amount of cash required to 
be held as a legal reserve and correspondingly expands (in- 
creases) the surplus reserve. 

Generally speaking, also, the bank statement is unfavorable 
or if particularly unfavorable is bad when the position of the 
banks has been weakened, as by a decrease in the surplus re- 
serve through a decrease in their cash holdings rather than by 
an increase in their deposits, which often is effected by an 
expansion in (increase in the amount of) their loans, which 
correspondingly expands (increases) their deposits and 
correspondingly increases the amount of cash required to be 
held as a legal reserve. This additional amount is deducted 
from and correspondingl}^ reduces the surplus reserve. 

The bank statement may be said to be favorable or good, 
however, if an increase in loans is reported when the banks 
are surfeited with money ; also the bank statement may be said 
to be unfavorable or rather not good (but hardly bad) when 
it shows that money is accumulating in idleness in the banks — 
when deposits are increasing, not as a result of increasing 
loans, but in the absence of a borrowing demand for money. 

There are other circumstances which make the bank state- 
ment favorable or unfavorable as disclosed in the circum- 
stances themselves. 



SMITH'S FINANCIAL DICTIONARY. 6i 

There is also a non-member bank statement, which is a 
statement of the condition of banks which are not members of 
the clearing house but clear through members. This state- 
ment is issued from the clearing house on Monda}^ and shows 
the average condition of the banks for the week ending with 
and including the preceding Friday. 

The non-member bank statement contains the name of each 
bank followed by its capital, net prohts, average amount of 
loans and discounts and investments, average amount of 
specie, average amount of legal tender notes and (national) 
bank notes, average amount on deposit with its clearing house 
agent (the bank through which it clears at the clearing house), 
average amount on deposit with other New York city banks 
and trust companies, average amount of net deposits and 
average amount of circulation. 

Bank stock. The capital stock of a bank. When the term 
is used indefinitely it means the capital stock of some bank, 
but of no bank in particular. 

In London bank stock means the stock of the Bank of Eng- 
land. 

Bar. See Gold bar; see Silver bar. 

Bargain. A mutual contract, agreement or understanding 
between two or more parties as to something to be done, trans- 
ferred or the like ; or as to terms or methods. 

The term bargain also means an advantageous transaction ; 
or something bought or offered at a low price. 

To bargain means to dicker; to haggle over price or terms. 

On the London Stock Exchange the term employed for a 
transaction between two members is bargain. 

Bargain chop. A term formerly used by foreign traders in 
China and appHed to an option (see Option) on opium. 

Bargain counter. In Wall Street when stocks are cheap 
(low in price) they are said to be on the bargain counter. 

Bargain-hunter. Wall Street name for an investor who 
awaits his opportunity to buy in slumps or declines when 
prices are low (cheap) — when bargains in securities are to be 
obtained. 

Bargain marked. London Stock Exchange term, meaning 
that a transaction has been recorded on the "marking board" 



62 SMITH'S FINANCIAL DICTIONARY. 

from which it is reproduced in the official list. See Marking 
bargains. 

Barrel. The standard or commercial barrel of pork is reck- 
oned at 200 pounds. It contains 190 pounds of fresh or green 
meat and the addition of brine increases the weight to 220 or 
225 pounds. A barrel of flour contains 196 pounds ; salt, 280 
pounds ; resin, 280 pounds ; cured fish, 200 pounds. The num- 
ber of gallons in a barrel of molasses, syrup, oil, turpentine, 
vinegar, wine, liquor or other liquid varies from 40 to 50. 

Barren money. A term applied to money that is earning no 
interest. 

Barter. The exchange of commodities or services ; trade. 

Base-metal money. Money made of metals less valuable 
than gold and silver. Base-metal money in the United States 
consists of the minor coins, the 5-cent nickel and the i-cent 
bronze coins. 

Base-metal token. Same as base-metal money ; in the 
United States the base-metal tokens are the minor coins, the 
nickel 5-cent piece and the bronze i-cent piece. 

Basis price. A price which does not include items, sizes, 
qualities, etc., for which the trade usually makes an extra 
charge. 

"B" bond. A bond in an issue divided into a series num- 
bered alphabetically. 

Bear. A speculator- who works to secure or who believes in 
lower prices ; one who sells stock short (sells stock he does not 
own) in expectation of buying back at a lower price. A specu- 
lative dealer in grain, cotton or any other commodity may be 
a bear. 

A speculator may be a bear ostensibly but not a bear in 
fact. For instance, he may desire to acquire stock, but to do 
so to advantage he first depresses the price by wash orders 
(see Washing) or other devices. He actually buys (goes 
long) of the stock at the low price and if the stock then ad- 
vances above the original price the speculator increases his 
profit to the extent of the decline efifected by him preliminary 
to his actual purchases. 

The French for bear is baissier. 

Bear account. Uondon Stock Exchange term ; means the 
interest in the market which has sold stocks that it does not 



SMITH'S FINANCIAL DICTIONARY. 63 

own and does not mean to deliver and is waiting for a fall in 
order to buy them back for less than the price that they were 
sold for. The term is also applied to the volume of commit- 
ments open on the bear (short) side. For additional informa- 
tion see Account, The. 

Bear dance. A colloquial term applied when bears in stocks 
are compelled to cover or are frightened into covering their 
shorts at a loss — when they buy back stocks at prices higher 
than those at which they sold them. 

Bearer. The holder ; the person who is in possession, as the 
person who is in possession of a check, bill (bill of exchange) 
or promissory note that is payable to bearer. 

Bearing the market. A speculative designation of the act of 
forcing down prices. 

Bear market. A speculative term which signifies a declin- 
ing market; in other words, that the tendency of prices is 
downward. 

Bear of stocks. London Stock Exchange term equivalent to 
the New York Stock Exchange expression short of stocks, 
which means one who has sold stocks that he did not own -in 
expectation of buying them back at a lower price than that at 
which he sold them. 

Bear panic. Said when bears in stocks are frightened into 
covering their shorts at a loss, or in other words, into buying 
back at a loss (at higher prices) the stocks they had sold short ; 
see Short. 

Below par. When the market price is below the par or face 
value; see Par. 

Best paper. Bills of exchange (drafts) and promissory 
notes of superior quality; specifically, bank paper; see Bank 
paper. 

Betterment. Improvement beyond mere repair; in the case 
of a railroad improvement of the physical condition of the 
property. 

Better price. A higher price than the price previously ob- 
tained or quoted. 

Between banks. This term is applied to a transaction in 
domestic exchange between two banks. 

In some of the less important cities clearing house balances 
are settled, not by cash, but by checks drawn by the manager 



64 SMITH'S FINANCIAL DICTIONARY. 

of the clearing house against debtor banks and in favor of 
creditor banks. The checks may be paid in cash or in 
cashier's checks which are presented at the clearing house next 
day or they may be paid in exchange on New York (or some 
other financial centre). If the creditor bank wishes to increase 
its balance with the bank which acts as its correspondent in 
New York it may prefer exchange on New York and may 
pay a premium for the privilege of receiving it instead of cash 
or a cashier's check. On the other hand, if its balance with 
the New York bank is excessive it may accept exchange on 
New York only at a discount. 

It is a transaction between banks, likewise, if a bank in a 
certain place, in Chicago, for instance, wishes to remit to, say, 
New York and buys a draft on New York from another bank 
in Chicago. 

Beyond sea trade. Said of trade with a country beyond an 
intervening sea, as the shipping of grain to a country across 
an ocean. 

Bid and asked. The bid price is the amount which one who 
desires to buy offers for a thing; the asked price is the amount 
which one who desires to sell asks for a thing. 

In dealings on the New York Stock Exchange bids and 
offers made and accepted in accordance with these rules are 
binding: 

All offers to buy or sell securities shall be for loo shares of 
stock or for $10,000 par value of bonds unless otherwise stated. 
Offers to buy or sell specific amounts other than as above 
stated may be made at the same time and may be independent- 
ly accepted. 

Bids and offers may be made only as follows : 

Cash (for delivery on the day of contract) ; regular way (for 
delivery on the business day following the contract) ; at 3 
days (for delivery on the third day following the contract) ; 
buyer's or seller's option for not less than 4 days nor more 
than 60 days. 

Bids and offers under each of these specifications may be 
made simultaneously as being essentially different proposi- 
tions and may be separately accepted without precedence of 
one over the other. 



SMITH'S FINANCIAL DICTIONARY. 65 

Bids and offers without stated conditions are considered to 
be in the regular way. 

In offers to buy on seller's option or to sell on buyer's op- 
tion the longest option has precedence. In offers to buy on 
buyer's option or to sell on seller's option the shortest option 
has precedence. 

On the New York Stock Exchange the first offer to buy or 
sell must be accepted before a subsequent offer at the same 
figure has standing. A subsequent offer to buy at a higher 
or to sell at a lower price vacates the previous offer to buy or 
sell. A transaction vacates both the previous bid and offer. 

Bid and asked quotations. The bid and asked quotations for 
stocks dealt in on the New York Stock Exchange are those 
printed by the ticker on the tape after the close of business on 
the exchange and while nominal are as nearly the actual prices 
offered for and asked for stocks as are possible to obtain. They 
are furnished by the specialists in the different stocks — the 
brokers who make a specialty .of executing orders in those 
stocks. 

The bid and asked quotations are the only gage to the 
market value of stocks infrequently dealt in, especially those 
in which one or more days have elapsed between transactions. 

Bid and offer. See Bid and asked. 

Bidding up. Making bids for the purchase of stocks (or 
commodities) at prices higher than actual market prices. 

Bid in. Said when property at public vendue (auction) is 
bid for and bought by parties in interest because a high enough 
price has not been offered for it. 

Again, the term bid in applies when at a foreclosure sale the 
property is bought for parties in interest. In the sale at fore- 
closure of a railroad the road may be and generally is bid in 
in the interest of the security holders. 

Bill. This term applies to a bill of exchange (draft) or to a 
promissory note or any document requiring payment. 

Also, a bill is a statement of an account or of money due ; 
a paper setting forth the particulars and amount of a debt. 

Bill at sight. A bill of exchange (draft) payable on pre- 
sentation, except where grace is allowed by law on a sight bill 
(bill at sight). A demand bill is generally construed as a bill 
that is payable absolutely on presentation, although in some 



66 SMITH'S FINANCIAL DICTIONARY. 

states and countries grace is allowed by law on a demand bill 
as well as on a sight bill. 

Bill-book. A book used in a bank in which is kept a record 
of promissory notes, bills of exchange (drafts), etc. 

Bill broker. An English term ; same as bill merchant ; one 
who negotiates the discounting of promissory notes, bills of 
exchange, etc., or who buys and sells them for his own profit. 
The name bill broker does not apply to a dealer in foreign ex- 
change. 

Bill case. This term is used more as a figure of speech than 
anything else. When it is said that a bank's bill case is full 
it is meant that it has a large stock (supply) of bills — promis- 
sory notes and bills of exchange (drafts) ; when it is said that 
a bank's bill case is empty it means that it has no bills on hand. 
As a fact most banks keep their bills in a portfolio. 

Bill discounted. This term is generally accepted as mean- 
ing a note discounted, but it may mean a draft discounted. 

Bill for acceptance. The name given to a bill of exchange 
(draft) which is to be presented to the drawee (the one upon 
whom it is drawn) for acceptance by him, which consists in 
his writing on the face of the bill the word "Accepted," which 
is equivalent to a promise to pay it when it becomes due. 
(Also see Bill for payment). When accompanied by docu- 
ments a bill for acceptance is called a documentary bill for 
acceptance, or for short, a document for acceptance. 

A bill for acceptance may be either a domestic or a foreign 
bill. A merchant in Chicago, for instance, may be indebted to 
a merchant in New York. Payment, however, is not to be 
made until some time in the future. The New York merchant 
draws on the Chicago merchant for the amount of the in- 
debtedness and forwards the draft for acceptance by the Chi- 
cago merchant, or he may sell the bill (draft) to a bank or a 
dealer in exchange, who will forward it for acceptance. 

Again, a merchant in London may be indebted to a merchant 
in New York, The New York merchant draws on the London 
merchant and forwards the draft for acceptance by the Lon- 
don merchant, or he may sell the bill (draft) to a dealer in for- 
eign exchange, who will forward it for acceptance. 

Bill for payment. The name given to a bill of exchange 
(draft) which is to be presented for payment (for collection), 



SMITH'S FINANCIAL DICTIONARY. 67 

as distinguished from a bill for acceptance (see Bill for accept- 
ance). When accompanied by documents a bill for payment is 
called a documentary bill for payment, or for short, a document 
for payment. 

A bill for payment may be either a domestic or a foreign 
bill. A merchant in Chicago, for instance, may be indebted to 
a merchant in New York. The New York merchant draws on 
the Chicago merchant for the amount of the indebtedness and 
deposits the draft in his bank, which forwards it to Chicago for 
payment (for collection from the Chicago merchant), or he 
may sell the bill (draft) to a bank or a dealer in exchange, who 
will forward it for payment (collection). 

Again, a merchant in London may be indebted to a mer- 
chant in New York. The New York merchant draws on the 
London merchant for the amount of the indebtedness and for- 
wards the draft to London for payment (for collection from 
the London merchant), or he may sell the bill to a dealer in 
foreign exchange, who will forward it for payment (collection). 

Bill merchant. An English term ; same as bill broker ; one 
who negotiates the discounting of promissory notes, bills of 
exchange, etc., or who buys and sells them for his own profit. 
The name bill merchant does not apply to a dealer in foreign 
exchange. 

Bill of adventure. A written statement or declaration by a 
shipper or carrier that the shipment is the venture of another 
person and that the shipper or carrier is responsible for 
nothing but delivery as consigned. 

Bill of credit. A written request to the one to whom it is 
addressed to give credit to the bearer on the voucher or 
security of the writer. 

Bill of exchange. A written order or request from one 
person to another for the payment of money to a third, the 
amount to be charged to the drawer (issuer) of the bill. 

There is practically no difiference between a bill of exchange 
and a draft. The term bill of exchange, however, is commonly 
applied to an order for money payable in a foreign country, 
whereas the term draft is applied to an order payable within 
the country of its origin. 

A check dated ahead is usually regarded as a bill of exchange 
rather than a check. 



68 SMITH'S FINANCIAL DICTIONARY. 



It is a common practise to speak of a bill of exchange (draft) 
issued by a bank or banker as a check when it is payable at 
sight or on demand. 

A bill of exchange payable at a future date. becomes in fact 
a note upon its acceptance by the drawee — the one upon whom 
it is drawn. 

If the amount stated in words and the amount stated in fig- 
ures in a bill of exchange do not agree the words govern. 

Bills of exchange constitute the most important circulating 
medium. The wholesale transactions of the world are effected 
by bills of exchange, which are not limited like bank notes to 
the country of their origin. 

When commercial bills of exchange are accompanied by, 
that is, secured by bills of lading or warehouse receipts or by 
other documents they are of a superior nature. They com- 
mand a lower rate of discount, or in other words, bring a bet- 
ter price than bills not secured. In a stringent money market 
they are salable when other bills are refused. Bills not secured 
by property are loans on personal security. 

For additional information see Domestic exchange ; also see 
Foreign exchange. Also see Draft; also see Negotiable in- 
strument. 

Bill of lading. A written acknowledgement by a railroad, 
steamship company or other carrier of the receipt of goods for 
transportation. 

Bill of sale. A document given as security for a debt 
wherein the debtor transfers to the creditor the right to prop- 
erty specified in the bill, which property may be seized and 
disposed of by the creditor upon the non-fulfilment of the 
obligation by the debtor. 

Billon. An alloy of gold or silver with a base metal, as cop- 
per or tin ; specifically, an alloy of silver with a large propor- 
tion of copper in coins, tokens or medals. 

Bill payable. The name given to a bill of exchange (draft), 
promissory note or other written engagement to pay money 
by the person who must pay it. 

Bill receivable. A written evidence of debt that is payable 
to the holder; a promissory note or an acceptance (a bill of 



SMITH'S FINANCIAL DICTIONARY. 69 

exchange that has been accepted) is in the hands of a person 
to whom it is payable a bill receivable. 

A bill receivable that is included under the head commercial 
paper is a promissory note that has been received for goods 
sold and that has in order to effect its discount (sale) been 
indorsed by the party who received it. 

Bill rendered. A statement presented by a creditor to his 
debtor of an account or of money due ; a paper presented set- 
ting forth the particulars and amount of a debt. 

Also see Account rendered. 

Bimetalism. The free and unlimited coinage (at an estab- 
lished ratio) of both gold and silver into coins of full debt- 
paying power; not the mere use of the double standard, but 
the existence of mints open for the coinage of both metals on 
terms of defined equality. 

Bimetallic standard. Exists when the basis of values is gold 
and silver at an established ratio. 

The mere possession by a country of the bimetallic or double 
standard is not the same thing as bimetalism, an essential 
feature of which is a mint open to the coinage of any quantity 
of either gold or silver that may be brought to it. 

Bit. A name applied in the Southern and Western states to 
the old Spanish real, which used to circulate in those states 
and was worth nominally 12 1-2 cents. 

Bituminous coal. Commonly called soft coal ; mineral coal, 
containing 30 to 50 per cent of volatile matter; designated as 
coking coal when used for the production of coke, furnace coal 
when suited for use in a blast-furnace and cannel coal when 
rich in gas with low heating power. Bituminous coal is found 
in many parts of the United States. 

Black book. In financial vernacular when a person has lost 
his credit, as by failure to meet his financial obligations, he is 
said to be in the black book or on the black list. The black 
book or black list is a private book kept by a bank or other 
financial institution containing (a list of) the names of dis- 
credited borrowers of money. 

Black Friday. Friday, September 24, 1869. At that time 
gold was subject to considerable fluctuation in value and it was 
bought and sold the same as stocks. 

Jay Gould, then the president of the Erie Railroad and a 



70 SMITH'S FINANCIAL DICTIONARY. 

daring speculator, conceived the idea of buying up all the gold 
in the market and compelling those who had sold it short to 
buy of him at a greatly increased price when their contracts 
should mature. He associated others with him in the scheme 
and put it in operation. He forced the price up from 133 to 162 
in about twenty days. The high price was reached on Black 
Friday. The greater part of the increase in price was accom- 
plished on that day and the day preceding. 

On Black Friday the Gold Bank, through which the trans- 
actions in the Gold Room were cleared, failed and the gov- 
erning committee of the Gold Room at once ordered a suspen- 
sion of dealings in gold for one week. More than half the 
members of the Gold Room failed. The corner in gold col- 
lapsed and the price of gold immediately fell. 

The attempt of Mr. Gould and his associates to corner gold 
was based on the fact that the United States Treasury had dis- 
continued the sale of gold, which was calculated to place and 
maintain a premium on it. Indeed, the purpose of discon- 
tinuing its sale was to establish, not a moderate, but a consid- 
erable premium on it. The balance of international trade at 
the time was heavily against the United States and in favor of 
Europe. It was thought and it was urged by exporters and 
importers of products and manufactures alike that a high pre- 
mium on gold would force the exportation of United States 
products, which would serve to discharge obligations of the 
United States to Europe and thereby obviate the necessity of 
sending gold to Europe. 

Mr. Gould and his associates counted on a continuance of 
the new rule of the Treasury not to sell gold, but when the 
corner was in effect and the great increase in the premium on 
gold had been accomplished by the speculative coterie in it 
there was a widespread appeal to the Secretary of the Treasury 
to resume sales of gold. The appeal was acceded to and the 
corner in gold collapsed with the disastrous consequences 
already recounted. 

There are two Black Fridays in British financial history. 
On a Friday early in December, 1745, London heard that the 
young pretender, Charles Edward Louis Philip Cassimer 
Stuart, was at Derby, only 120 miles from London, with his 
invading force. A panic ensued with an accompanying run 



SMITH'S FINANCIAL DICTIONARY. 71 

on the Bank of England, but it was stopped by the sending of 
a force under the Duke of Cumberland to meet Charles Edward 
and his followers. 

The second Black Friday in London was May 11, 1866, 
when there was a panic with a run on the banks as a conse- 
quence of the announcement late in the afternoon of the day 
before of the failure of the great discount house of Overend, 
Gurney & Co., Limited, which had only a year before been 
converted from a private concern into a joint-stock company. 

Black list. In financial vernacular when a person has lost 
his credit, as by failure to meet his financial obligations, he is 
said to be on the black list or in the black book. The black 
list or black book is a private book kept by a bank or other 
financial institution containing (a list of) the names of dis- 
credited borrowers of money. 

Bland bill. The bill introduced in the House of Representa- 
tives by Mr. Bland providing for the coinage of silver on the 
same terms as gold (for the free coinage of silver) at the ratio 
of 16 to I. At the commercial (market) price of silver the 
ratio at the time was 18 to i. 

The bill was amended in the Senate by Mr. Allison and be- 
came a law on February 28, 1878, by being passed over the veto 
of President Hayes. As amended it provided for the purchase 
by the government of not less than $2,000,000 worth nor more 
than $4,000,000 worth of silver bullion each month and the 
coining of it into silver dollars, these to be legal tender. The 
Bland bill thus became the Bland-Allison act. It was super- 
seded by the Sherman act, which see. 

Bland dollar. iV name sometimes applied to the standard 
silver dollar issued under the Bland-Allison act. For addi- 
tional information see Bland bill. 

Blank certificate. The term applied to a certificate of stock 
or a registered bond signed (assigned) in blank; see Assigned 
in blank. 

Blank credit. Permission to draw up to a given amount 
upon a firm or individual. 

Blanket mortgage. A colloquial name for a mortgage cover- 
ing everything ; a general mortgage. 

Blank indorsement. A blank indorsement on a check, bill of 
exchange (draft), promissory note or other negotiable instru- 



72 SMITH'S FINANCIAL DICTIONARY. 

ment or paper is when the paper is not transferred specifically 
to a new holder, but when the name of the payee (the holder ; 
that is, the owner of the paper) is written alone (by itself) on 
the back of the paper. Thus, ownership is transferred to any 
one who may be in possession of the paper. 

Blank transfer. An English term which is equivalent to 
assigned in blank, or to use the commoner expression, signed 
in blank. For additional information see Assigned in blank. 

Blind figure. A bookkeeping and accounting term ; a figure 
so carelessly or indistinctly written that it may be taken 
for another figure as a 2 for a 7 or a 3 for an 8 or a 7 for a 9, 
etc. 

Blind pool. Said when several persons contribute capital 
to a pool (mutual fund) only the manager of which knows in 
what way the money is to be used. The purpose of a blind 
pool is to insure secrecy. 

A speculative blind pool is not uncommon. The operations 
of a blind pool in the stock market, for instance, may be con- 
fined to a single stock or it may be extended to several stocks. 
There may be a blind pool in a scheme of almost any nature. 

Block. The term applied to a large number of shares of 
stock, as 5,000 or 10,000 shares ; or a large amount of bonds, as 
$500,000 or $1,000,000. 

Blotter. In bookkeeping the blotter is the first record book. 

Blue list. A list (shorter than the red list) of the stocks 
most actively dealt in on the New York Stock Exchange print- 
ed on blue paper daily. The high, low and last prices are given 
together with the number of shares of each stock dealt in. 

Blue note. This is a term sometimes applied to the note 
given when a loan on call is obtained. The note is so called 
because it is frequently printed on blue paper to make it easily 
distinguishable from a note given for a time loan, which is 
almost invariably printed on white paper. 

Blue pup money. The slang name applied to the notes or 
circulating medium (substitute for money) formerly issued by 
plank road companies — companies which constructed and main- 
tained plank roads and collected toll from persons who used 
the roads in travel or traffic. The notes so issued were in 
small denominations, mostly for fractional amounts, and were 
ostensibly for use in paying toll, but they freely passed current 



SMITH'S FINANCIAL DICTIONARY. 73 

as money in the sections where they originated. They are 
said to have first been issued in Indiana. They were called 
blue pup money to distinguish them from red dog money, 
which name was given to notes of another kind and of larger 
denominations; see Red dog money. 

BNK. As printed on the tape by the stock ticker these 
letters mean bank. 

Board. It is a common habit for members of the New York 
Stock Exchange, and in fact of any exchange, to speak of the 
exchange as the board. The expression *'on the board" means 
on the exchange. 

The name may have been and very likely was derived from 
an earlier title of the New York Stock Exchange — "New 
York Stock and Exchange Board." 

The largest speculative dealings in grain and provisions in 
the United States are conducted by a body officially designated 
as a board — the Chicago Board of Trade. 

The term board is also applied to the board in a broker's 
office on which quotations are posted. 

The term board is also applied to the printed lists of trans- 
actions in detail on the New York Stock Exchange; see Stock 
lists. 

Board of directors. The governing body of an incorporated 
company. 

The word directorate is sometimes used in place of the 
longer term board of directors ; sometimes, also, the word di- 
rectory is used in place of board of directors. 

For additional information see Director. 

Board of trade. A title often adopted by an organization 
formed to promote mercantile or commercial interests. 

It also is a title sometimes bestowed on an exchange or trad- 
ing organization, as the Chicago Board of Trade, the members 
of which conduct speculative operations in grain and pro- 
visions on an extensive scale. 

The British Board of Trade is a department or bureau of 
the government which compiles and publishes returns as to 
exports and imports, returns as to railway traffic, and labor 
statistics. AVhen British Board of Trade returns are referred 
to Avithout particularization they are taken as meaning the ex- 
ports and imports of the United Kingdom. These particular 



74 SMITH'S FINANCIAL DICTIONARY, 

figures are published on the 7th of each month. Railway- 
traffic returns (gross) are published in the first half of every 
week. Labor statistics are published monthly. 

Board room. The name by which the trading room of an 
exchange often is designated. 

Boatload. As used in the grain trade this term refers to a 
canal boatload. An Erie canal boat has an average capacity 
of 8,000 bushels of grain. Also see Cargo. 

Bob. An English colloquialism for a shilling, equal to 24.3 
cents. 

Bobtail pool. A Wall Street colloquialism. The- term is 
applied to an informal pool in a stock. For instance, four or 
five speculators may agree to buy (if it is a bull pool) 1,000^ 
or 2,000 or 5,000 shares each of a certain stock in expectation 
of an advance in the price and to stimulate an advance in the 
price and each usually is allowed to suit his pleasure in sell- 
ing his stock. 

In a formal pool the members appoint a manager who buys 
the stock for the account of all and likewise sells the stock for 
the account of all. The individual members have no hand in 
either buying or selling. 

There are bear pools as well as bull pools. In a bear pool 
the stock is sold short in expectation of and for the purpose of 
facilitating a decline in the price. When the price has de- 
clined the stock is bought. 

Boerse. The German spelling of bourse ; see Bourse. 

Bona fide. In good faith. For instance, a bona fide bid for 
a stock is a bid in good faith. 

Bonanza. A colloquialism, meaning a rich mine or vein or 
find of ore. The term is also applied to a highly profitable 
investment or speculation. 

Bond. A certificate of obligation to pay money secured by 
mortgage or otherwise. A bond issued by a corporation (or 
by a municipality or government) is an interest-bearing debt 
certificate. 

The securities issued by a government are generally desig- 
nated as bonds instead of stock. The securities issued bv the 
United States government are designated as bonds, although 
formerly known as stock. Some of the securities issued by 
the city of New York are designated as stock; but municipal!- 



SMITH'S FINANCIAL DICTIONARY. 75 

ties as a rule designate their securities as bonds instead of 
siock. 

A coupon bond (as distinguished from a registered coupon 
bond) is one both interest and principal of which are payable 
to bearer. A registered coupon bond is one which bears the 
name of the owner and his name also is registered (recorded) 
on the books of the company issuing it, but the interest is 
payable to the bearer — to the holder of the coupon, detachable 
from the bond, which calls for the payment of an instalment of 
interest when it has become due. A registered bond (not reg- 
istered coupon bond) is one bearing the name of the owner. 
The name of the owner also is registered (recorded) on the 
books of the company issuing it and the interest payments are 
made by checks forwarded to the address of the owner. 

A gold bond is one specifically payable, both interest and 
principal, in gold coin ; a currency bond is one payable, both 
interest and principal, in any kind of money that is legal 
tender; a guaranteed bond is one the payment of the interest 
and principal of which is guaranteed by a company or institu- 
tion other than the one which issued it (sometimes only the 
payment of the interest is guaranteed). A large bond is a 
single bond for~$io,ooo; a small bond is a bond for less than 
$500. A long bond is a bond that runs for many years ; a 
short bond is a bond that runs for a few years. A secured or 
backed bond is a bond that is secured by pledge of property; 
a plain bond is a bond that is not secured by pledge of prop- 
erty (it is an unsecured debenture bond and is merely a 
promise to pay — a promissory note). 

It is a common practise to designate bonds by the rates of 
interest they bear, as 3 i-2s, 4s or 5s. 

Railroad bonds are usually described as prior-lien bonds, 
first mortgage bonds, general (or "blanket") mortgage bonds, 
consolidated mortgage bonds, second mortgage bonds, equip- 
ment bonds, land grant bonds, sinking fund bonds, collateral 
trust bonds, adjustment bonds, debenture bonds, participating 
bonds, income bonds, convertible bonds. 

The chief features of these bonds are as follows : Prior-lien 
bonds are a lien ahead of all other bonds, but ordinarily cover 
or represent only a small part of the value of the whole prop- 
erty ; first mortgage bonds are issued under a mortgage which 



76 SMITH'S FINANCIAL DICTIONARY. 

is first in lien, or in other words, takes precedence of mortgages 
subsequently created (sometimes there is a lien — a prior lien — 
ahead of a first mortgage) ; general (or ''blanket") mortgage 
bonds are issued under a mortgage which is a first lien on 
everything not already mortgaged; consolidated mortgage 
bonds are issued under a mortgage which has superseded two 
or more other mortgages; second mortgage bonds are issued 
under a mortgage which is a second lien or a lien after the 
first lien ; equipment bonds are secured by mortgage on equip- 
ment ; land grant bonds are based on grants of land and are 
retired by the proceeds of the sales of land ; sinking fund 
bonds are bonds for the redemption of which a sinking fund 
is established ; collateral trust bonds are secured by pledge of 
collateral (stocks and bonds) ; adjustment bonds are as a rule 
issued to pay for improvements and generally rank as second 
mortgage bonds ; debenture bonds are promissory notes in the 
form of bonds ; participating bonds are debt certificates which 
receive interest at a varying rate as permitted by revenues ; 
income bonds receive interest, if earned, before dividends can 
be paid on stock of the company issuing them (practically pre- 
ferred stock) ; convertible bonds are bonds which are conver- 
tible into (exchangeable for) stock. 

The term bond also applies to an obligation in writing and 
under seal in which a person binds himself to pay to another 
a certain sum of money at a specified time. 

Also, to bond means to put under pledge or under forfeit in 
a penal sum. 

Also see In bond. 

Bond broker. One who makes a specialty of dealing in 
bonds. 

Bond call. The act of calling off at an exchange or trading 
place the list of bonds dealt in there. As the names of the 
bonds are called the buyers and sellers make their bids and 
offers. 

Bond creditor. A creditor whose claim is secured to him by 
a bond. 

Bonded. Secured by a pledge of property or some other 
form of guaranty. 

A railroad is bonded for, say, $50,000,000 when its property 
has been mortgaged as security for an indebtedness of that 



SMITH'S FINANCIAL DICTIONARY. 77 

amount and bonds have been issued under the mortgage to 
represent the indebtedness. 

Also see In bond. 

Bonded debt. A debt to represent which bonds have been 
issued. 

Bondholder. One holding or owning bonds, as government 
bonds or railroad bonds. - 

Bond of indemnity. A written instrument guaranteeing 
protection against loss. 

Bond power. The name given to the irrevocable power of 
attorney used in assigning or transferring title to a registered 
bond. 

Bonds borrowed and loaned. The practise in borrowing 
and lending bonds is the same as in borrowing and lending 
stocks. For information see Borrowing and lending stocks. 

Bond to bearer. English term for a coupon bond — that is, a 
bond not registered in the name of the owner on the books of 
the company or government issuing it, but transferable like 
money by merely passing from one to another, the interest 
payments being represented by coupons which are detachable 
and payable to bearer. 

Bonus. A premium or gratuity; something given free in 
addition to what is usual or stipulated. 

It is not an infrequent practise on the organization of a stock 
company to give to purchasers of the preferred stock as a 
bonus that is, without charge, a certain percentage (perhaps 
an equal amount) of common stock. Sometimes when a com- 
pany issues bonds it gives to purchasers a bonus in stock. 

In Great Britain when an extra dividend or dividend in ex- 
cess of the regular dividend is declared it is called a bonus. 

Book debt. An overdue account; usually rated as good, 
doubtful or bad. 

Booked. Entered in a book ; recorded. When, for instance, 
an order is said to have been booked it is meant that it has been 
recorded. 

Book of account. A book in which entries of commercial 
transactions are kept. 

Books close. Relates to transfer books for stocks. 

On an advertised day prior to the payment of a dividend on 
a stock the transfer books close and the stockholders then of 



78 SMITH'S FINANCIAL DICTIONARY, 

record receive the dividend. On and after the day the books 
close the stock sells ex-dividend or without the dividend. 

The transfer books also are closed on an advertised day- 
prior to an election or other stockholders' meeting and only- 
stockholders then of record can vote at that election or meet- 
ing. 

A contract in a stock falling due during the regular closing 
of the transfer books of the company is settled at maturity by 
the delivery of a certificate and power of attorney; on a con- 
tract which is at the option of the buyer or of the seller notice 
for settlement may be given as if the books were open. In case 
the books are closed for a dividend the party entitled to it re- 
ceives a due bill for it. 

Also see Books open. 

Books open. Only when the transfer books of a company 
are open can the ownership of securities be changed in the 
record ; in other words, in the interval between the closing and 
the opening of books stocks cannot be transferred on the books. 

Also see Books close. 

Book value. The book value of a stock is based on the net 
profits or deficit of the corporation which issued it. It is a 
frequent practise in quoting bank stocks to give book values 
as well as market prices. 

Illustration : If a bank has net profits (accumulated surplus 
and undivided profits) equal to 75 per cent on the stock then 
the book value of the stock is the original amount of the stock, 
100 per cent, plus the equivalent in net profits, 75 per cent, or 
altogether 175. On the other hand, if the bank shows no net 
profits, but instead shows a deficiency equal to, say, 5 per 
cent on the stock the book value of the stock is only 95. 

The book value of the stock of a railroad or manufacturing 
company is ascertained in the same manner as the book value 
of the stock of a bank. 

Boom. A colloquialism, meaning a rush of business accom- 
panied by a quick inflation of values. 

Boot money. Money given as an extra compensation by 
one of the parties in an exchange of property ; it is said in such 
a case that so much was given to boot, meaning into the 
bargain. 

Borrowed stock. Stock the use of which is borrowed for the 



SMITH'S FINANCIAL DICTIONARY. 79 

purpose of making delivery on a short contract. For informa- 
tion see Borrowing and lending stocks. 

Borrowing and lending stocks. When a speculator sells 
stock which he does not possess (when he sells it short) he 
(or what is the same thing, the broker w^ho acts for him) 
has to borrow the stock to make delivery to the purchaser. 
The one who possesses stock (who is long of it) is in ordi- 
nary circumstances as anxious to lend it as the one who has 
sold it short is anxious to borrow it. 

The lender of stock receives from the borrower the market 
value of it in money, but except when the stock is lending flat 
(without interest) or at a premium the lender of the stock 
pays to the borrower of it interest on the money paid for the 
stock by the borrower. The rate of interest is determined by 
bid and offer. 

On the New York Stock Exchange brokers who have stocks 
to borrow and brokers who have stocks to lend assemble im- 
mediately after the close of business on the exchange and 
those who need stocks borrow amounts necessary to make 
deliveries the next day. Those who neglect to borrow at this 
time must do so the next morning or some time in the day 
before the delivery hour, 2.15 p. m. There is no loan crowd 
•in the morning, but borrowers seek lenders at the posts on the 
floor of the exchange around which the particular stocks that 
they require are dealt in. 

The same rules govern the receipt and deliver}^ of stocks 
borrowed and loaned as govern stocks bought and sold. In 
returning borrowed stock the borrower must notify the lender 
before i o'clock on the day of delivery ; the lender in calling or 
demanding the return of stock must do likewise. 

When a stock is loaned flat the owner is relieved from the 
cost of carrying the stock. If loaned at a premium he is still 
better oflf, for the premium is so much gain. When a stock is 
loaned at a premium the premium applies in the absence of a 
renewal of the loan only to the day on which the stock is 
loaned. 

If a stock that has been borrowed advances in market price 
the lender may require the borrower to pay to him the differ- 
ence between the price at which the stock was loaned and the 
new higher price. On the other hand, if the stock declines in 



8o SMITH'S FINANCIAL DICTIONARY. 

price the borrower may require the lender of the stock to 
return to him the difference between the price at which the 
stock was borrowed and the new lower price. These differ- 
ences are called market differences. 

When a corner is being worked up in a stock it is the prac- 
tise of those engineering it freely to loan the stock in order to 
encourage the creation of a short interest in it. When this 
short interest has become large enough, or in other words, 
when the stock has become sufficiently oversold a demand for 
the return of the stock brings the corner to a culmination. 

An apparent borrowing demand for stocks is sometimes 
created by the efforts of money lenders to obtain higher in- 
terest on their money than is obtainable in lending it in the 
money market. If the lending rate for a particular stock is, 
say, 6 per cent when money is lending at 4 1-2 per cent in the 
money market the money lenders will borrow the stock in 
order to obtain the extra interest. 

\Vhen a seller of long stock (stock actually owned) desires 
to create the impression that he is selling short stock (stock 
not owned or possessed) he has his broker borrow stock for 
delivery to purchasers. Then when he has completed his 
sales he delivers his own stock to the ones from whom his 
broker borrowed. 

Also, when a seller of stock desires to conceal his identity 
he has his stock transferred or made out in the name of his 
broker or a clerk or some other person previous to its de- 
livery to purchasers. 

Arbitrage dealers (see Arbitrage) often sell stock held 
abroad which will not be received for some time. They bor- 
row for delivery to purchasers and when their own stock ar- 
rives they make return to the ones from whom they borrowed. 

Corporations intending to issue new stock have been known 
to sell the stock in advance of its issuance and to borrow to 
make delivery to purchasers. Then when the new stock was 
issued it was used to make return to the ones from whom stock 
had been borrowed. 

Bottomry. A maritime contract whereby the owner of a 
vessel (or its master if in a foreign port) borrows money at 
maritime interest to enable him to make or complete a voyage, 



SMITH'S FINANCIAL DICTIONARY. 8i 

pledging or mortgaging the vessel as security without making 
himself personally liable in case of the loss of the vessel. 

Bought back. See Buying back. 

Bought in. See Buying in. 

Bought note. A memorandum of purchase delivered by a 
merchandise broker to the buyer of goods for whom the 
broker acted. 

Bought outright. See Buying outright. 

Bounty. A grant or allowance from a state or government 
for the encouragement of a trade or industry is a bounty. 

Bourse. The name for a stock exchange on the Continent 
of Europe. 

The Paris Bourse may be visited by all and merchants, 
manufacturers and others transact business there at certain 
hours of the day. There are, however, only seventy:_jDLffi£ial 
niembers or agents de change who deal in stocks and bonds. 
They are approved by the Minister of Finance. They stand 
in a small enclosure in the centre of the bourse called the par- 
quet. For additional information see Paris Bourse. 

The Berlin Bourse is under government supervision. The 
sworn agents de change on the bourse deal principally in gov- 
ernment securities, while the ordinary brokers or agents de 
change deal in railroad, mining and general stocks. Bank- 
ers, brokers and merchants are admitted to the bourse on pay- 
ment of an annual but varying subscription. 

The Vienna Bourse is under control of the government and 
business is carried on only by sworn agents de change, who are 
nominated by the government after paying an annual sub- 
scription and a fixed sum as an entrance fee. 

The German spelling of bourse is boerse. 

Boxing day. A legal holiday in Great Britain (excepting 
Scotland) and Ireland ; the first week day after Christmas, on 
which Christmas boxes are given to errand-boys, letter-car- 
riers, etc. 

Bradstreet's. The name of one of the commercial agencies. 

Branch bank. A national bank — that is, a bank organized 
under the National bank act — is not permitted to establish 
branches. To some extent, however, the same end is accom- 
plished by acquiring control of other banks. These controlled 
banks serve as and practically are branches of the controlling 



82 SMITH'S FINANCIAL DICTIONARY. 

or main bank. Their funds beyond the percentage of their 
deposits that they are required by law to hold in cash as a 
reserve are deposited with the main bank. 

In the banking systems of most countries the requirement 
as to bank capital is much higher than in the United States, 
but the banks are allowed to establish branches, thus being 
able to do business in many places, the branch banks answer- 
ing the purpose for which banks with small capital are organ- 
ized in this country. There are many advocates of the branch 
bank system who would have it adopted in the national bank- 
ing system of this country, but popular sentiment has re- 
mained strongly opposed to such a change. 

The advantages of branch banks may be illustrated by the 
case of the Bank of Montreal in Canada, which receives de- 
posits, for instance, at its branches in the farming regions of 
Nova Scotia where the demand for money is slight and lends 
the fimds at its branches in British Columbia where business 
is active and the demand for money large. The business inac- 
tivity of the Nova Scotia regions referred to would render 
small local banks unprofitable, so that accummulated savings 
would remain scattered in individual hands, earning no interest 
and performing no useful economic function. On the other 
hand, British Columbia would offer no possibility for the estab- 
lishment of large local banks that could supply the funds 
needed for business purposes for the reason that there is no 
accumulated capital to supply the banks with deposits in suffi- 
cient amount. 

Against these considerations it is urged that the system of 
large banks with many branches tends toward monopoly and 
the restraint of individual enterprise in banking and that the 
system of many small banks operated under the National 
baiik act has worked so successfully in this country that it 
should not be interfered with. 

Branch line. A line of railroad that is tributary to the main 
line. 

Breadstuffs. Under this head in the country's exports come 
grain, meal, bran, middlings, mill feed, dried grains, malt 
sprouts, flour, bread and biscuits. 

Break. An abrupt fall in prices, as in stocks or in grain, 
cotton, coffee, etc. 



SMITH'S FINANCIAL DICTIONARY. 83 

Breaking even. A colloquialism ; when a trade has been 
concluded without profit or loss the speculator is said to have 
broken even. 

Brocage. (Obsolete). The trade or occupation of a broker 
or the commission paid to him for his service ; now called 
brokerage. 

Broken lot. A term sometimes used in dealings in bonds, 
meaning less than $10,000; in stocks the term used is fractional 
lot or odd lot (less than 100 shares). 

Broker. One who executes orders for the purchase or sale 
of stocks or other property ; an agent. 

A broker cannot bind his customer without his express 
agreement by transacting business committed to him in any 
other than the ordinary and customary method. 

On the London Stock Exchange the broker is merely the 
middleman between the public and the jobbers. He acts as 
agent for the outside public, while a jobber buys and sells 
from or to the broker and covers himself by a purchase or sale 
wirh another jobber or broker. 

About one-third of the entire membership of the London 
Stock Exchange consists of jobbers ; one-third of brokers, and 
one-third of clerks. No member can act in the double capacity 
of jobber and broker and there can be no partnership between 
the two classes nor with any person who is not a member of 
the exchange. 

Authorized clerks, so-called, are admitted to the exchange, 
with power to deal and bind their principals. Unauthorized 
clerks, so-called, also are admitted, but have authority only to 
assist their employers by checking bargains and carrying out 
the routine work of the settlement. 

A person may be a member of the exchange and not be a 
shareholder. To become a shareholder one must be a member 
of the exchange, although this was not formerly the case. 

An ?,gent de change (member of the bourse) in Paris is for- 
bidden to trade on his own account. 

Brokerage. Buying and selling for others. The fee or com- 
mission charged for transacting such business is also called 
brokerage. 

Brokers' market. When the large operators and the outside 
public are not engaged in speculation and the brokers are 



84 SMITH'S FINANCIAL DICTIONARY. 

trading for their own account it is said to be a brokers' market. 

"B" stock. This is the English designation for preferred 
ordinary (common) stock. When for dividend purposes the 
ordinary stock of a company has been divided into two parts 
called preferred or ''B" stock and deferred or ''A" stock the 
dividend on the A stock is deferred until a fixed amount has 
been paid on the B stock. 

This B or peferred stock is not the same as preferred stock 
in the United States. What in the United States is called pre- 
ferred stock is in Great Britain called preference stock and 
preference stock in Great Britain may be divided into two 
or more classes called first preference, second preference, etc., 
just as preferred stock in the United States may be divided into 
two or more classes called first preferred, second preferred, 
etc. When, however, there is but one class of preference stock 
ahead of an ordinary stock in Great Britain the B or preferred 
stock is equivalent to second preferred stock in the United 
States. 

The letter B is also used to distinguish one stock from 
another without the connotation of ''preferred." Costa Rica 
B bonds and Mexican National Railroad B bonds are examples 
of this use. 

Bubble. A scheme which is illusory is said to be a bubble. 
The term bubble also is sometimes applied to a fraudulent 
scheme. 

For accounts of two ''bubbles" famous in financial history 
see Mississippi Company and South Sea bubble. 

Bubble act. An act of the British Parliament passed in 1720 
to' prevent fraudulent speculative schemes ; repealed in 1825. 

Bucketing. As distinguished from the manner in which a 
bucket shop operates (see Bucket shop) bucketing of stocks 
consists in sales by a broker (for his own account and risk) 
against customers' purchases or purchases by the broker 
against customers' sales. 

Such a proceeding if not illegitimate is at least considered 
irregular. The purpose may be to avoid the employment of 
money in carrying (holding) stocks, but more often the pur- 
pose of the broker is to speculate against his customers — or, in 
speculative vernacular, to take the other end or other side of 



SMITH'S FINANCIAL DICTIONARY. 83 

the customers' trades. In either case the broker wins if his 
customers lose or he loses if his customers win. 

As an example of bucketing, if a broker's customer buys 100 
shares of stock at, say, 100 the broker sells 100 shares at 
the same price. A cross trade is thus made by the broker; 
the transactions balance and the broker has not to pay out and 
lock up for an indefinite period the money representing thvi 
cost of the stock purchased for the customer. If the stock 
goes down to 98 and the customer sells while the broker buys 
the transactions again balance and the customer loses 2 per 
cent while the broker gains 2 per cent. On the other hand., if 
the stock goes up to 102 and the customer sells while the 
broker buys the customer makes 2 per cent while the broker 
loi^es 2 per cent. The broker, however, has reduced his loss by 
the extent of the commission received from his customer. If 
the commission is 1-8 each way — 1-8 per cent for buying and 
1-8 per cent for selling — his net loss is i 3-4 per cent. If the 
customer loses and the broker wins, as in the first illustration, 
the broker's gain is really 2 1-4 per cent instead of 2 per cent 
for the reason that his commission is added to his gain in the 
same way that in the second illustration it is subtracted 
from his loss. 

It may be that some customers of a broker have bought 
while others have sold a stock. If more has been bought than 
has been sold the broker will sell enough to effect a balance 
or if more has been sold than has been bought the broker will 
buy enough to effect a balance. 

In bucketing there is always a percentage represented by 
the commission (and augmented by interest charged against 
the broker's customers) in favor of the broker as against the 
customers, so that the broker profits by bucketing if he loses 
on half the transactions while his customers lose on the other 
half. 

Bucket shop. A place where bets are made on regular ex-| 
change quotations. 

No actual transactions take place. "Margin" (a bet) is put 
up by the "customer" and a commission is charged for "buy- 
ing" and "selling" the same as on an exchange. When the 
quotations show a profit to the "customer" (or bettor) he is 
privileged to demand the profit ; when the limit of the "cus- 



86 SMITH'S FINANCIAL DICTIONARY. 

tomer's" margin (from which has been deducted the commis- 
sion for both "buying" and "selling") has been reached the 
"customer" has lost his bet and the transaction is closed. ' 

Budget. English ; an estimate of (statement of probable) 
revenues and expenditures by the government in the ensuing 
year, with financial proposals in connection therewith, such as 
measures for meeting a deficiency or measures for disposing 
of a surplus. 

Building and loan association. A cooperative society for the 
saving and accumulation of money, the building of houses and 
the loaning of money, its operations being restricted to its 
own members. 

The banking law of the state of New York defines such a 
building and loan association as follows : "A corporation 
formed for the purpose of accumulating a fund for the pur- 
chase of real property, the erection of buildings, or the making 
of other improvements on lands, or to pay off encumbrances 
thereon, or to aid its members in acquiring real estate, mak- 
ing improvements thereon or removing encumbrances there- 
from, or of accumulating a fund to be returned to its members 
in specified cases." 

Bulge. A term used in speculation in commodities, particu- 
larly in grain ; means a quick advance in price. 

Bull. A speculator who works to secure or who believes 
in higher prices ; one who buys stocks, grain, cotton or any 
other speculative commodity in the expectation of selling it 
at a higher price. 

A speculator may be a bull ostensibly but not in fact. For 
instance, he may desire to acquire a short interest in a stock, 
but to do so to advantage he first advances the price by wash 
orders (see Washing) or other devices. He actually sells the 
stock short at the high price and if the stock then declines 
below the original price the speculator increases his profit to 
the extent of the advance effected by him preliminary to the 
making of his actual sales. 

The French for bull is haussier. 

Bull account. London Stock Exchange term; means the 
interest in the market which has bought stocks and is holding 
them to sell when they have risen in price. The phrase also 



• SMITH'S FINANCIAL DICTIONARY. 87 

denotes the volume of commitments open on the bull side. 
For additional information see Account, The. 

The corresponding phrase on the New York Stock Exchange 
is long interest. 

Bull campaign. A systematic, sustained effort to advance 
prices of stocks or commodities (grain, cotton, coffee, etc.). 

Bulling the market. Working to advance prices, as of 
stocks, grain, cotton or coffee, etc. 

Bullion. Gold or silver in ingots ; also uncurrent coin, such 
as old or foreign coins in mass intended for recoinage ; or gold 
or silver coined but considered simply with reference to its 
commercial value as raw material. 

Por particular information as to silver bullion see Silver 
bullion. 

Bullion note. Another name for Treasury note ; see Treas- 
ury note. 

Bullion point. Same as gold point or specie point ; see Gold 
point. 

Bullion value. The commercial value. In the case of coins 
the bullion value is the commercial or market value of the 
metal they contain. 

Bull of stocks. London Stock Exchange term for what on 
the New York Exchange is called long of stocks ; it means one 
who has bought stocks in expectation of selling them at a 
higher price than he paid for them. 

Bull ring. A colloquial name applied to a circular or ellip- 
tical railing of heavy metal on the floor of an exchange or 
board (usually where dealings in grain, cotton or coffee, etc., 
are conducted.) Around (outside) this railing transactions 
are effected. 

Bumper crop. A colloquial name for a bountiful or very 
large crop. 

Bumper crops of wheat, corn and cotton are important for 
the reason, for one thing, that they create tonnage for the rail- 
roads that depend largely for their earnings on these crops 
and, for another thing, because they constitute a good part of 
the country's exports. Wheat is exported largely in the kernel 
and in the form of flour. Corn is exported in the kernel and 
as meal and also in the form of provisions, being used exten- 



88 SMITH'S FINANCIAL DICTIONARY. 

sively as feed for hogs from which are derived pork, lard, hams, 
bacon, etc. Cotton is exported heavily in its raw state. 

Bunco game. A term applied to any swindling operation. 

The term was originally applied to the pretended sale of 
counterfeit money and the delivery to the buyer of a package 
containing sawdust or some other worthless article, as paper. 
This particular form of swindling is also known as the sawdust 
game. 

Bushel. A bushel by the usual standard contains in 
pounds : Barley 48, beans 60, buckwheat 42, clover seed 60, 
corn 56, corn in ear 68, corn meal 50, flaxseed 56, hempseed 44, 
oats 32, onions 60, peas 60, potatoes 60, rye 56, salt 56, timothy 
seed 45, wheat 60, wheat bran 20. 

Business. The term business applies to something con- 
ducted for profit, as banking, commerce, manufacturing, mer- 
chandising, brokerage, etc. It is, however, loosely used in the 
sense of profession, calling and employment. 

Business hours. Banking hours are from 10 a. m. to 3 p. m. ; 
on Saturday from 10 a. m. to 12 noon. On the New York 
Stock Exchange the hours of business are the same. 

The hours of business on the London Stock Exchange are 
from II a. m. to 4 p. m. ; on Saturday from 11 a. m. to 1.30 p. m. 

Business paper. Another name for commercial paper ; see 
Commercial paper. 

Buy. To acquire in exchange for money or other consid- 
eration. 

Buyer four or ten, twenty, thirty or sixty, etc. Delivery of 
stock so bought may be demanded by the buyer on any day 
within the number of days specified on one day's notice to the 
seller. The buyer must in any event receive and pay for the 
stock on the final day. ^ 

The buyer must, unless the contract is flat (without inter- 
est), pay to the seller interest at the legal rate on the price 
up to the day of delivery. The amount of a dividend becoming 
due on the stock during the pendency of the contract belongs 
to the buyer. 

No contract on buyer's (or seller's) option for less than 4 
days or which extends beyond 60 days can be entered mto on 
the New York Stock Exchange. 

Buyer's option. In stocks bought on buyer's option the 



SMITH'S FINANCIAL DICTIONARY. 89 

buyer may demand delivery of the stock on any day within the 
time specified on one day's notice to the seller. The buyer, 
unless the contract is flat (without interest), pays the seller 
interest at the legal rate on the price of the stock up to the day 
of delivery. The amount of a dividend becoming due during 
the pendency of the contract is payable by the seller to the 
buyer. 

No contract on buyer's (or seller's) option for less than 4 
days or which extends beyond 60 days can be entered into on 
the New York Stock Exchange. 

Buyers over. London Stock Exchange term, meaning that 
there are buyers at 1-32 of a pound over a figure or fraction. 
Over 99 is 99 1-32 ; over 1-2 is 17-32. 

Buyer the year. A contract which gives the seller the right 
to call for the delivery of the property at any time within the 
year. 

No contract on buyer's (or seller's) option for less than 4 
days or which extends beyond 60 days can be entered into 
on the New York Stock Exchange. 

Buying a bull. London Stock Exchange term, meanmg 
buying in expectation of an advance in price. The term means 
the same as the^ew York Stock Exchange term "buying long 
stock," as distinguished from buying back stock that has been 
sold short. 

Buying and selling dividends. Prohibited on exchanges be- 
cause it is calculated unduly to influence the prices of the 
stocks concerned. 

Buying and selling dividends in advance of their declaration 
is, however, a common practise. A speculator may buy the 
forthcoming dividend on 1,000 shares of a certain stock (as to 
the size of which there is doubt) for, say, i 1-4 per cent. If 
the dividend is i 1-2 per cent the buyer receives from the seller 
the difference, 1-4 per cent; if the dividend is i per cent the 
buyer pays to the seller the difference, 1-4 per cent, which on 
1,000 shares is $250. 

Buying back. Buying back is a term used when a specula- 
tor who is short of a stock covers — when he buys a stock which 
he had previously sold without having owned it. 

Buying for investment. See Investment securities. 



go SMITH'S FINANCIAL DICTIONARY. 

Buying in. The act of purchasing stock to enable the return 
of stock that has been borrowed. 

The term also applies to buying under the rule; see Under 
the rule. 

The term buying in also applies when property at public 
vendue (auction) is bought by parties in interest because a 
high enough price has not been offered for it. 

The term buying in applies when at a foreclosure sale the 
property is bought for parties in interest. In the sale at fore- 
closure of a railroad the road may be and generally is bought 
in the interest of its security holders. 

On the London Stock Exchange when the seller of a security 
does not deliver it by the date when it is due the buyer in- 
structs the official broker to ''buy it in" — that is, to make a 
fresh purchase for cash by bidding for the security in the mar- 
ket. The difference in price, if any, and the ofificial broker's 
commission are paid by the original seller. 

Buying outright. Buying and paying in full for stocks. See 
For cash. 

Buying rate. In dealings in exchange the buying rate is the 
rate at which exchange is bought by a dealer in it. 

By-bidder. One who bids at auction in behalf of the owner 
for the purpose of advancing the price. 

By-laws. Rules adopted by an association or corporation 
for the government and conduct of its affairs, but at the same 
time subordinate to its constitution or charter. 



SMITH'S FINANCIAL DICTIONARY. pJ 



c 



C. As printed' on the tape by the stock ticker this letter 
means class C (of bonds) or coupon or, when following a sale, 
cash. 

Cable. A cable despatch reporting a foreign market. 

Also, a transfer of money (or its equivalent, credit) by cable 
is called for short a cable. 

Cable transfer. A transfer of money (or its equivalent, 
credit) by cable. For additional information see Foreign ex- 
change. 

Call. A call (on a stock) is a contract or written agreement 
binding the issuer to deliver to the holder stock named in the 
agreement within a certain time at a certain price if the holder 
shall so demand (or in other words, call for the stock). 

For example, A signs a promise to deliver loo shares of some 
specified stock to B at lOO at any time within 60 days if B 
makes a demand for it. A sells this promise to B for, say, 
$100. If within the 60 days the stock rises in price so that 
B can sell it at a profit B sells and calls on A to make delivery 
of the stock. The stock must go above loi before there is a 
profit for B. If the stock declines or does not go above loi 
B, of course, does not call for it and A makes $100 on his risk. 
In calling for the stock B must give one day's notice except 
on the last day, v/hen no notice is required. 

If a dividend becomes due on a stock during the pendency 
of a call on it the dividend goes to the holder of the call if he 
elects to receive and pay for the stock. 

A call on grain or cotton, cofifee, etc., is based on the same 
general principle as in the case of stocks. 

For additional information see Privilege.' 

Also, a call is the act of calling off at an exchange or trading 
place the list of stocks and bonds or the different options 
or futures (months of delivery) in grain, cotton, coffee, etc. 
As the various stocks or commodities are called the buyers 
and sellers make their bids and offers. 



^2 SMITH'S FINANCIAL DICTIONARY. 

The term call also is applied to the demand from the com- 
pany issuing a stock or share that is not fully paid for a further 
payment or instalment from the holders; the word thus has 
come to be used loosely for the amount of the instalment or 
assessment. This use of the word is, of course, distinct from 
the term call when an option (privilege) is referred to. 

Called bond. When the right is reserved by a company 
which has emitted a bond to redeem (pay) it after a certain 
time and notice of the exercise of this right is given the bond 
is called in — the bond is then a called bond. Interest on such 
a bond ceases after the bond is called. 

Call letter. A term used in Great Britain for a letter from 
a company or other issuer of securities demanding from 
holders the payment of a call or assessment on the securities. 

Call loan. A loan payable on call or demand; collateral is 
usually provided to secure the loan. 

In New York state the requirement that not more than 6 
per cent interest shall be charged on money loaned does 
not apply to call loans. The law says : ''Upon advances of 
money repayable on demand to an amount not less than five 
thousand dollars made upon warehouse receipts, bills of 
lading, certificates of stock, certificates of deposit, bills of 
exchange, bonds or other negotiable instruments, pledged as 
collateral security for such repayment, any bank or individual 
banker may receive or contract to receive and collect, as com- 
pensation for making such advances, any sum to be agreed 
upon in writing by the parties to such transaction." 

In a stringency in money the rate for call loans goes very 
high. Many times it has gone to 3-4 of i per cent "and inter- 
est," which is equivalent to the rate of 279 3-4 per cent a year. 
The 3-4 per cent is the premium paid on the money and 
the interest is at the legal rate, which in New York state 
is 6 per cent. The premium is not paid each day while the 
loan stands, but is a premium paid for obtaining the loan. 
But the loan might be called (the return of the rrroney de- 
manded) the next day, in which case the borrower might have 
to pay the same premium for a renewal of it with the same 
lender. 

By New York Stock Exchange rules a demand for the return 
of a call loan must be made before i p. m. and payment must 



SMITH'S FINANCIAL DICTIONARY. 93 

be made before or at 2.15 p. m. the same day. Also, notice 
of intention to pay a call loan must be given before i o'clock 
and payment must be made before 2.15 o'clock. 

It is not the practise of the banks in the Wall Street district 
to require from regular borrowers a new note every time a call 
loan is made. The continuing agreement (see Continuing 
agreement) covers new call loans as well as old ones. If, 
however, a special note is exacted the regular stock note (col- 
lateral note — see Collateral note) is used, the note being made 
payable on demand (in a time loan the note is made payable at 
a specified time). 

Notes used in call loans are generally printed on colored 
paper (most frequently blue paper) to distinguish them easily 
from time notes, which are almost invariably printed on white 
paper. 

The advantage in borrowing money on call is that it need 
not be retained when the borrower no longer has use for it. 

In Great Britain the term generally used for call loan is 
day-to-day loan. 

Call money. Money borrowed which is returnable on the 
call or demand of the lender. See Call loan. 

Call of more. London Stock Exchange term ; a call of more 
gives the holder the right to call for the delivery by the seller 
of an additional amount of stock equal to the amount named in 
the bargain, or in other words, to call for twice as much stock 
as is named in the contract. If a man buys £1,000 consols 
with the call of more at 96 1-2 he can call for the delivery by 
the seller of £2,000. For this extra right or privilege the 
holder of the call pays an extra price. 

Call paid. On the London Stock Exchange a stock or share 
is said to be dealt in ''call paid" when a call or assessment 
has been made upon it and has been paid by the seller. It is 
the opposite of cum call ; see Cum call. 

Cambism. The theory and practise of exchange, particu- 
larly foreign exchange ; see Foreign exchange. 

Cambist. A dealer in (foreign) exchange ; a manual giving 
the moneys, weights and measures of different countries and 
their equivalents is also called a cambist. 

Cancelling certificates. Stock certificates, bonds and cou- 



94 SMITH'S FINANCIAL DICTIONARY.. 

pons are usually cancelled by punching holes through the sig- 
natures on them. 

Cancel order. An order recalling or countermanding a pre- 
vious order to buy or sell, as stocks, grain, cotton, coffee, etc. 

Capel Court. This term signifies the speculative centre in 
London as Wall Street signifies the speculative centre in 
New York. 

The Capel court entrance to the London Stock Exchange 
looks out upon the east front of the Bank of England on 
Bartholomew lane, but the other entrances, on Throgmorton 
street and Old Broad street, are more thronged. 

The name Capel Court was given to the London financial 
centre from the fact that the entrance to the first building 
erected (1801) for use as a stock exchange was from Capel 
court. 

Capital. Wealth employed in or available for production. 

Specifically, the capital of a stock company is the property 
and perhaps good will used in its business at a valuation on 
which profits or dividends are calculated. The valuation is 
represented by stock. Bonds in contradistinction to stock 
represent indebtedness. 

Capital amount. The original amount or sum ; principal. 

Capital expenditure. Expenditure against which capital 
stock is issued. 

Capitalist. An owner of capital, especially one who has 
large means. 

Capitalization. Placing a value on and creating something 
to represent that value. 

For instance, the capitalization of a business consists in 
placing a value on it and then issuing stock to represent that 
value. Bonds in contradistinction to stock represent an in- 
debtedness. 

It is a common practise, however, to speak of the amount 
of the bonds of a company and the amount of its stock, both 
added together, as the capitalization of the company — as the 
amount for which it is capitalized. 

Capital liabilities. The stock issued by a company. It is a 
common practise, also, to include bonded indebtedness under 
this head. 

Capital sum. The original sum or amount; principal. 



-SMITH'S FINANCIAL DICTIONARY. 95 

Captain of Industry. This title, while not new, was brought 
into general use by a luncheon in New York arranged in honor 
of Prince Henry of Prussia when he visited the United 
States in 1902 and which was attended by men at the head of 
or who by their genius, means or otherwise w^ere responsible, 
in whole or in part, for the creation and development of im- 
portant industries in the United States. John Pierpont Mor- 
gan, a leading financier, presided at the luncheon and the men 
who attended it were designated Captains of Industry. 

Cargo. A name for all or for any part of the goods or mat- 
erial with which a vessel is loaded. 

Car lots. A grain trade term which refers to the number of 
cars of grain received and inspected daily at the chief grain 
centres. 

Car miles. A railroad term ; the number of miles traversed 
{in a year or other given time) by all cars on a railroad. The 
number of miles traversed by all cars divided by the number 
of cars shows the average number of miles traversed by each 
car. Car miles means the same as car mileage. 

Carrying. A speculator who is long of stocks is carrying 
stocks ; likewise, a broker who has bought stocks for a cus- 
tomer on margifi is carrying the stocks. 

Carrying charges. A designation for the interest paid by 
buyers of stocks on the money represented by the difference 
between the margin deposited and the purchase price of the 
stock. Sellers of short stocks as a rule have not to pay 
interest charges ; only buyers have to pay such charges. 

Grain carrying charges consist of storage, interest and 
insurance. They are represented by the excess of the price for 
future delivery over the cash price (the price for immediate 
delivery). Illustration: If wheat for a future delivery is 
4 cents higher than cash wheat (wheat for immediate deliv- 
ery) the 4 cents represents warehousing and insurance up to 
the expiration of the contract. If the cash market (price) 
declines i cent before the termination of the contract the short 
seller makes 5 cents profit ; if it remains stationary he makes 
4 cents ; if it advances 3 cents he still profits i cent. 

Carrying over. On the London Stock Exchange carrying 
over is the postponement of the adjustment of an account 
until another settlement (settlements occur fortnightly). Each 



g6 SMITH'S FINANCIAL DICTIONARY. 

bargain carried over is closed for cash and reopened for the 
new account (see Settlement, The). 

Carrying over charges are those which the buyer or seller 
(as the case may be) has to pay for the privilege of not receiv- 
ing or delivering stock at the regular time. The charge for 
non-payment of cash for stock is called contango. A contango 
is generally paid by bulls and received by bears ; but if a stock 
has been so much oversold that it is scarce for delivery a 
charge is made for non-delivery of the stock, which is called a 
backwardation; this is paid by bears and received by bulls. 
If the accounts balance the rate is even. 

Carry-over. On the London Stock Exchange carry-over is 
a term used to signify the aggregate of the contracts in one 
or in all stocks continued or carried over to the next settle- 
ment. 

The carry-over as a whole designates the collective operation 
by which the speculative position open for the rise or fall is 
continued from one settlement to the next. When the posi- 
tion open is for the rise speculators have to borrow money and 
pay a contango rate to money lenders ; when the position open 
is for the fall speculators have to borrow stock from the 
holders and pay them a backwardation. It is, however, a com- 
paratively rare occurrence that a stock is so much oversold 
by speculators that a backwardation can be exacted from them. 

Carte blanche order. In stocks or in commodities an order 
conferring unlimited authority in buying (or selling). 

Car trust. A trust created for holding title to cars until 
paid for by the railroad which bought and is using them. 
Certificates or bonds, so-called, are issued under the trust, the 
same as under other liens or mortgages. 

Cartwheel. A colloquial name for the silver dollar of the 
United States ; so called because of the large size of the coin. 

Case of need. See In case of need. 

Cash. A colloquial name for money. 

Also, a cash (or spot) transaction is a transaction for imme- 
diate consummation and settlement. Usually in mercantile 
dealings, however, the term cash permits payment within lo 
days. 

For the application of the term cash to dealings in stocks 
and commodities see For cash. 



SMITH'S FINANCIAL DICTIONARY. 97 

Also, to cash means to make collection. For instance, to 
cash a check or a coupon is to make collection of the amount 
of it. 

Also, cash is the name given to the coin used as small change 
in China and parts of the East Indies. The cash of China is 
i-io candareen and is equal to i-io cent. 

Cash assets. Assets consisting of cash in hand or in bank 
or assets that can readily be converted into cash (money). 

Cash credit. Usually a credit at a bank established by the 
negotiation of a loan from a bank which the borrower is 
privileged to draw against by check. 

Cash dividend. One payable in cash ; that is, by check, 
which calls for cash. 

Cashier. An officer of a bank or other moneyed institution, 
having charge of its funds. 

The mechanism of a bank is under the control of the cashier, 
who is accountable to the board of directors, by whom he is 
appointed and to whom he gives bond. 

The name cashier also is commonly applied to the person 
who receives and pays out money for a corporation or firm. 
Such a person in a bank is called a teller. 

Cashier's cheek. A check upon a bank signed by its cashier. 
When money is borrowed from a bank the borrower, unless 
the money is to be placed to his credit in that bank, receives 
from the cashier a check for the amount which he may deposit 
in any other bank or may make payable to somebody else the 
same as any other check. 

A cashier's check constitutes a common form of exchange ; 
see Exchange. 

Cats and dogs. A colloquial name for worthless securities. 

CB. As printed on the tape by the stock ticker these letters 
mean currency bond. 

Cent. One-hundredth part of a dollar (United States) ; 
there is a bronze coin bearing the name cent. 

Also see Moneys of the world. 

Cental. A hundredweight or lOO pounds avoirdupois. 

Central institution. A name often applied in Great Britain 
to the Bank of England. 

Central reserve cities. See Reserve cities. 

Certificate of deposit. A certificate of deposit is a receipt 



98 SMITH'S FINANCIAL DICTIONARY. 

from or acknowledgment by a bank that a certain amount of 
money has been entrusted to it as a special deposit. It is 
transferable. It may be made payable by a correspondent of 
the bank in some other place. A certificate of deposit cannot 
be drawn against by check. 

A certificate of deposit is called a demand certificate when 
it is payable on demand or a time certificate when it is payable 
on or after a certain future time. A time certificate usually 
bears interest at a specified rate. 

A certificate which represents stock deposited for the reor- 
ganization of a company or for some other purpose is also 
called a certificate of deposit. 
.X Certificate of indebtedness. An acknowledgment of debt. 
If not paid within the time named in it the holder may apply 
for the appointment of a receiver. See Bond. 

Certificate of stock. The document which attests ownership 
of the amount of stock specified in it. 

The New York Stock Exchange rarely admits to dealings 
stocks of the par (face) value of more than $ioo or bonds of 
more than $10,000. Nor does it accept as a delivery a single 
certificate for more than 100 shares of stock or a single regis- 
tered bond for more than $10,000. Delivery of coupon bonds 
must be in denominations of $1,000 or $500, large bonds (over 
$1,000) or small bonds (less than $500) being good only in 
special transactions. 

When a broker buys stock for a speculator the certificate is 
not made out in the name of the speculator. A certificate 
signed (assigned) in blank (see Assigned in blank) is received 
by the buying broker from the selling broker and this certifi- 
cate may on the resale of the stock be delivered to the new 
buying broker, and so on, the same certificate continuing to 
serve indefinitely in transactions. 

Certification. For the meaning of this term on the London 
Stock Exchange see Certified transfer. 

Certified accountant. Another name for chartered account- 
ant ; see Chartered accountant. 

Certified check. A check having written across its face the 
signature of (usually) the cashier or paying teller of the bank 
on which it is drawn certifying to the signature of the drawer 
and to the fact that the latter has sufiicient funds on deposit 



SMITHS FINANCIAL DICTIONARY. 99 

with which to pay it. Funds are held in reserve from the 
drawer's account by the bank to meet the check. 

When the holder of a check takes it to the bank upon which 
it is drawn and has it certified the drawer of the check and 
the indorsers, if there are any, are released and thereafter the 
holder must look to the bafik alone. The bank is absolutely 
liable upon the check unless it was "raised" either before or 
after certification. The bank by certifying the check guar- 
antees the genuineness of the signature of the drawer and 
certifies that it has in its possession funds belonging to the 
drawer sufficient to meet the check and it thereby engages 
that those funds shall not be withdrawn by the maker of the 
check to the prejudice or loss of any bona fide holder of the 
check. 

But the certification of the check does not imply any further 
or greater responsibility or imply that the body of the check 
is genuine. When, therefore, a check is raised before certifi- 
cation the certifying bank cannot be called upon to pay the 
amount of the raised check ; or if a bank certifies a raised 
check by mistake and pays the same without culpable negli- 
gence it can recover the amount as money paid by mistake 
and the same rule applies if the check is raised after certifi- 
cation. 

In some cities checks are not certified by banks, but instead 
due bills, so-called, are employed. When guaranty of the pay- 
ment of a check by a bank is desired the check is delivered to 
the bank which retains the check and issues in place of it a due 
bill payable by the bank itself. This due bill may be deposited 
in another bank the same as a check. 

Also see Overcertification. 

Certified transfer. English term ; when a stockholder has 
sold only a portion of the stock represented by a certificate 
held by him the certificate and a transfer deed (assignment) 
are lodged with the company which issues a fresh certificate 
to him for the amount unsold and indorses the transfer to the 
effect that it is good for the remaining amount of stock ; then 
the transfer is said to be certified or marked and the act of 
certifying or marking is called certification. 

CH. As printed on the tape by the stock ticker these letters 

L.ofC. 



100 SMITH'S FINANCIAL DICTIONARY. 

mean clearing house (clearing house of the New York Stock 
Exchange). 

Chain rule. An arithmetical operation which, by means of 
a chain of intermediate relationships, establishes a comparison 
betwen two quantities not directly related. Chain rule is used 
largely in calculations in foreign e^cchange. 

Chairman. The one who presides at a meeting, as a meeting 
of a board of directors. 

Also see Chairman of the Board. 

Chairman of the board. When the board of directors of a 
railroad company or other company is presided over by an 
officer designated as the chairman of the board instead of by 
the president of the company the chairman of the board is the 
directing financial officer and is in fact the head of the com- 
pany. The president then occupies a subordinate position ; 
he is the chief operating officer or the chief managing officer. 

Chamber of commerce. A title often adopted by an organ- 
ization formed to promote commercial or mercantile interests. 

Chancellor of the Exchequer. The minister of finance in the 
British Cabinet. 

'Change. An abbreviation of exchange. 

In London the term 'change is, strictly speaking, only ap- 
plied to the market for foreign bills. *'On 'change" means in 
the foreign bills (foreign exchange) market, which meets on 
Tuesdays and Thursdays in the Royal Exchange (see Course 
of exchange). But the term is also used loosely and inaccu- 
rately of the stock exchange. 

Change alley. The early meeting place (1698 to about 1773) 
of dealers in shares and stocks in London. 

Charge. A debit entry in an account ; also, the price de- 
manded for a thing ; also, a burden or encumbrance on property 
or resources, as interest on a bond or mortgage. 

In making exchanges at the Banker's Clearing House in 
London the term charge means the total of articles (items, 
checks, drafts, etc.) presented by one bank for collection from 
another bank. The term employed in the United States is 
exchanges or collection items. 

Charge and discharge. The presentation in a chancery 
court (court of equity) of the claims and accounts of the plain- 
tiff against the defendant and those of the defendant against 



SMITH'S FINANCIAL DICTIONARY. loi 

the plaintiff so that the balance of account may be determined 
by the court. 

Charges. See Carrying charges. 

Charges forward. A commercial term, meaning that the 
carrying and other charges are to be paid by the receiver of 
the property. 

Charter. The charter of a company is the authority con- 
ferred upon it by a special act of legislature to do business and 
the act defines the purposes and prescribes the privileges of 
the company. 

It is a common though incorrect practise to designate as a 
charter the articles of incorporation of a company that is 
formed under the general laws. - In such a case the company 
merely is incorporated — not chartered — and its articles of in- 
corporation are merely the papers it files with the proper 
authority specifying its purposes, etc. 

Also, the contract for the lease of a vessel for a voyage is 
called a charter. 

Chartered accountant. English ; one who holds a charter 
(certificate) from the Institute of Chartered Accountants sta- 
ting that he has passed an examination and is competent to 
perform an accountant's work. 

Charter party. The agreement or contract entered into 
when a vessel is chartered. 

Chasing eighths and quarters. A colloquialism ; used to de- 
scribe the occupation of a so-called scalper in a speculative 
market, who is content with small profits — eighths and quar- 
ters. 

A scalper is generally a member of an exchange who trades 
for his own account and has not to pay commissions. 

Chattel. Any article of personal property. A certificate of 
stock, bond, bill of exchange (draft) or promissory note is a 
chattel. 

Cheap money. Money is cheap when it is obtainable at a 
low rate. At such a time the prices of securities are likely to 
advance, not because they are worth more, but because money 
is worth less, the purchasing power of money having de- 
creased. 

Check. An order for money that is on deposit with a bank, 
banker, trust company or other monetary institution. 



102 SMITH'S FINANCIAL DICTIONARY. 

A check differs from a bill of exchange in that it is always 
payable on demand and always purports to be drawn against 
a deposit of funds. 

If the amount stated in words and the amount stated in fig- 
ures in a check do not agree the words govern. If a check 
passes out of the maker's hands "without having been dated 
the holder may write in the space provided for the date a date 
which must be the date upon which the check was received by 
him but no other date. A check dated ahead is usually re- 
garded as a bill of exchange rather than a check. 

When a check is paid before the date written on it the money 
so paid can be recovered. 

A bank is not liable to the holder of a check unless and 
until it accepts or certifies the check. A bank is not bound 
to make partial payment on a check if the drawer has not 
sufficient funds to his credit to make payment in full. 

If a depositor draws several checks amounting in the aggre- 
gate to more than he has standing to his credit the bank pays 
the checks in the order of presentation without regard to dates 
or numbers until the depositor's credit is exhausted. The 
bank may refuse to honor checks subsequently presented. 

Nothing is gained by adding to a check the words ''in full 
settlement" with the idea of compelling the acceptance of an 
amount smaller than the amount of the claim for the payment 
of which the check is issued. The creditor to whom the check 
is issued may collect the check and still sue for the balance 
yet due him. One reason he is allowed to do so is because 
in such a case there is no consideration for his agreement to 
forgive the other part of his debt and an agreement without 
consideration cannot be enforced. 

In most states the death of a bank depositor revokes any 
checks that he may have drawn which have not been pre- 
sented up to that time. A bank is protected in paying a check 
after the drawer's death if ignorant of the event. 

In most states it has been held that a check does not operate 
as an assignment to the holder of the amount of the depositor's 
money that it calls for, so that if the bank refuses to pay the 
check the holder has no right of action against the bank, his 
remedy being against the drawer. In such a case the drawer 
is the only one who has right of action against the bank. Ac- 



SMITH'S FINANCIAL DICTIONARY. 103 

cordingly, though a bank ought to pay checks in the order of 
their presentation, it need not do so 'and the drawer is the 
only one who legally can complain if it does not. 

The holder of a check ordinarily may delay presentation of 
it to the bank without absolving the drawer from liability. If, 
however, the bank at which the check is payable fails after the 
check has been outstanding for a reasonable time and the bank 
at the time of its failure is in possession of funds of the drawer 
sufficient to pay the check the loss falls on the holder of the 
check. 

But in order to hold the indorser the check should be pre- 
sented to the bank for collection the day it is received by the 
payee (the one to whom the amount of it is to be paid) — it 
must be presented the following day. In case the payee does 
not reside in the place where is situated the bank upon which 
the check is drawn the payee must transmit it for collection 
not later than the hour for the closing of the last mail on the 
day following the day on which he received it. A bank receiv- 
ing it for collection must forward it on the day of its receipt. 
To send it through various banks or through parties in various 
places constitutes negligence if the time of presentation is 
thereby delayed. 

If the check is sent to an agent for collection he is bound to 
present it on the day of its receipt if received in business 
hours. Sundays and holidays are not counted as days under 
this rule. 

. When a depositor in a bank offers for deposit a check drawn 
by another depositor in the same bank the bank may refuse to 
accept it or it may accept it unconditionally or conditionally. 
If accepted conditionally the condition commonly imposed is 
that the check is to be held over until the close of banking 
hours and then is to be accepted or rejected in accordance 
with the state of the drawer's account. If the check is ac- 
cepted unconditionally the bank is responsible for the amount 
of it whether the depositor's accoimt is good for the sum or 
not. 

The Court of Appeals of New York state has held : ''When 
a genuine check, drawn by one of its depositors upon a bank, 
is presented by the drawee to that bank for deposit it is sub- 
stantially a demand for payment by the holder of the check. 



104 SMITH'S FINANCIAL DICTIONARY. 

If the bank accepts the check and pays it, either by delivering 
the currency, or giving the party credit for it as a deposit, the 
transaction is closed between the bank and such party. The 
bank is liable for the amount of the check, although on the 
same day, and before the close of banking hours, but after it 
had paid other checks of the drawer presented later, it returned 
the check to the depositor as not good, and although the ac- 
count of the drawer was overdrawn at the time of the deposit. 
In the case of a deposit of a check drawn upon itself the bank 
becomes at once the debtor of the depositor, and the title to 
the deposit passes to the bank." 

The Supreme Court of the United States has reached the 
same conclusion. Quoting the New York ruling with ap- 
proval it said : "When a check on itself is offered to a bank 
as a deposit the bank has the option to accept or reject it, or 
to receive it iipon such conditions as may be agreed upon. If 
it is rejected there is no room for any doubt or question be- 
tween the parties. If, on the other hand, the check is offered 
as a deposit and received as a deposit, there being no fraud 
and the check genuine, the parties are no less bound and con- 
cluded than in the former case. Neither can disavow nor 
repudiate what has been done. The case is simply one of an 
executed contract. There are the requisite parties, the requi- 
site consideration, and the requisite concurrence and assent of 
the minds of those concerned." 

If a deposit is made in a bank to the credit of A as agent for 
B the bank may pay checks drawn in proper form by the 
agent unless or until notified by the principal not to do so. 
The bank is privileged to assume that a check drawn in proper 
form by the agent in favor of a third person is drawn in the 
course of the agent's performance of his duties and it may 
honor them accordingly. The bank, however, having had 
notice that the funds are held by the agent in a fiduciary 
capacity can have no lien on them for a private debt of the 
depositor, that is, the agent, to it. If it allows the agent to 
use any part of the funds in the settlement of balances due 
from the agent to the bank arising out of its dealings with 
hini in his private capacity the bank can be compelled to reim- 
burse the principal for such amounts. 

A check payable by the United States Treasury must be 



SMITH'S FINANCIAL DICTIONARY. 105 

indorsed for collection in handwriting and not by stamp as is 
a common practise with bank checks which are to be deposited 
for collection. 

It is a common practise to speak of a demand bill of ex- 
change (draft) issued by a bank or banker as a check, for it, 
like a check, is payable on presentation. 

For additional information see Negotiable instrument. 

Also, to check means to test the accuracy of memoranda or 
entries by comparison. 

Check bank. See Cheque bank. 

Checkbook. A book containing blank forms of checks. 

Check collection charge. A charge made by banks for the 
collection of checks payable at banks in other places. For 
additional information see Collection charge. 

Check exchange. Check exchange means sight exchange ; 
a check is payable at sight, or in other words, is payable on 
presentation. 

Checking a bargain. London Stock Exchange term ; all 
bargains done between members or firms are checked next 
morning in a room in the basement of the exchange before the 
beginning of business in the house (exchange). The clerks 
who perform this work repeat to one another the terms of the 
bargain and if there is any dispute refer it at once to their prin- 
cipals ; they are known as checking clerks and are admitted to 
the exchange as attendants for their employers, but are not 
allowed to transact business, whereas authorized clerks, so- 
called, are allowed to transact business on the exchange for 
their employers. 

The corresponding New York Stock Exchange term is com- 
parison ; see Comparison. 

Cheque. The English way of spelling check. 

Cheque bank. The cheque (check) bank was a London in- 
stitution which furnished a convenient mode for remitting 
money. It sold a cheque (check) payable to a person named 
for the amount of the cheque, plus a small commission. Un- 
fortunately its business was not conducted successfully and 
it went into liquidation. 

Cheque exchange. Cheque (check) exchange means sight 
exchange; a cheque is payable at sight, or in other words, is 
payable on presentation. 



io6 SMITH'S FI1^A]>^C1AL DICTIONARY. 

Chicago Board of Trade. The exchange in Chicago where, 
deahngs in grain, provisions, etc., are conducted on an exten- 
sive scale. 

The official title of the Chicago Board of Trade is "Board of 
Trade of the City of Chicago." The board was formed as a 
voluntary organization in 1848; in 1850 it was incorporated 
under the general incorporation law of the state of Illinois and 
in 1859 a special charter was granted to it by the legislature of 
Illinois. 

Chicago check. The name given to the form of check 
where the dollar mark to be followed by the amount in figures 
is at the end of the line on which the payee's name is written 
instead of, as generally, in the lower left hand corner. 

Childers. London Stock Exchange name for the 2 3-4 per 
cent British consols redeemable in 1905, which were inaugu- 
rated by Mr. Childers. 

Chop. A mercantile term, meaning a brand. Exporters to 
the Orient place on their goods a distinguishing chop, usually 
in native characters, so that the natives, who would not under- 
stand other marks, may order by chops with which they are 
familiar. 

Chopped dollar. The name in China for a Mexican or other 
silver dollar that has been chopped (stamped with native char- 
acters). 

Chose. Any personal property. 

Chose in action. A right to personal property or money not 
in possession but recoverable in an action at law ; also, a note, 
bond or other written obligation upon which suit may be 
instituted. 

Chose in possession. Any property in rightful possession. 

C. i. f. These letters are commonly used in dealings in 
grain, cotton, etc., to signify that cost, insurance and freight 
are paid or included. For additional information see Cost, 
insurance and freight. 

Cipher code. Same as code ; see Code. 

Circular letter of credit. Commonly called traveler's letter 
of credit ; a demand bill of exchange (draft) issued by a dealer 
in exchange and payable in instalments by foreign correspond- 
ents of the issuer or for that matter by domestic correspond- 
ents. 



SMITH'S FINANCIAL DICTIONARY. 107 

The letter is a circular letter in the fact that it is addressed 
to any and all the correspondents of the issuer. When it is 
desired to obtain money the letter is presented to a correspon- 
dent of the issuer with a check on the issuer for the sum de- 
sired. The correspondent usually prepares (fills out) the 
check and the holder of the letter signs it in his presence. 
The signature must be written exactly as it previously had 
been written on the letter of credit. The correspondent re- 
tains the check, writes in the sum drawn on the letter and 
then returns the letter to the holder. 

For instance, a letter of credit is purchased in New York 
by a person who is going abroad. In London he may pre- 
sent it to the correspondent of the issuer and draw part of 
the amount of it in pounds sterling. In Paris he may present 
it to another correspondent and draw more money, this time in 
francs. In Berlin he may draw marks, and so on until the full 
amount of the credit is exhausted. 

Circular note. A note for a specified amount issued by a 
dealer in exchange and payable by any correspondent pf the 
dealer. It is 'intended for the use of a traveler. 

A traveler purchases a number of these notes, say, for £10 
each. The trayeler indorses each as he presents it for pay- 
ment. He is provided with a letter of indication which bears 
his signature and the signature on the note must correspond 
with the signature in the letter of indication. 

Circulating capital. Capital that once used for a purpose is 
not again directly available for the same purpose, as wages. 

Circulating medium. Money or anything that serves as 
money. 

Circulating note. A promissory note in circulation as 
money, as a bank note. 

Circulation. Money in use. The term is commonly ap- 
plied to notes issued by national banks, for information as to 
which see National bank note. 

City. In London the term City is commonly used to desig- 
nate the financial district surrounding the Bank of England 
and the stock exchange, the same as the term Wall Street is 
commonly used to designate the district in New York sur- 
rounding and including the stock exchange and other impor- 
tant financial institutions. 



io8 SMITH'S FINANCIAL DICTIONARY. 

City editor. London title for the writer of the article in a 
newspaper which describes conditions and operations in the 
financial markets, including the market for stocks and bonds. 
In the United States the title is financial editor. 

Classified bonds. An issue of bonds is sometimes divided 
into two or more classes ; for instance, into class A, class B, 
etc., which classifications are usually abbreviated into A 
bonds, B bonds, etc. The A bonds may be entitled to interest 
at or up to a specified rate before interest is paid on the B 
bonds ; or the classification may be for the purpose of desig- 
nating bonds of one kind which bear different dates of issue 
and likewise mature at different dates. 

Classified stock. A stock is classified when any particular 
kind of stock is divided into two or more classes, as, for in- 
stance, when preferred stock is divided into first preferred and 
second preferred and perhaps third preferred. 

In Great Britain ordinary (common) stock is frequently 
divided into two classes — B and A ; other names for these two 
classes being preferred ordinary and deferred ordinary. 

Clean acceptance. A clean acceptance on a bill of ex- 
change (draft) is when the drawee (the one who is to pay the 
bill) writes on the face of it only the word ''Accepted" followed 
by the date and signature or followed by the date, signature 
and place of payment. Another name for clean acceptance is 
general acceptance. 

Clean bill. The name given to a bill of exchange which is 
not accompanied by documents. For instance, a banker's bill, 
which is an order from a banker in one place to a banker in 
another place to pay the holder the amount of it in the second 
place, is a clean bill. 

Clean bond. A coupon bond without indorsements or other 
writing on the back. 

Also see Indorsed bond. 

Clean dollar. The name in China for a Mexican or other 
silver dollar that has not been chopped (stamped with native 
characters). 

Clearance. A certificate from the proper authority that a 
vessel bound for a foreign port has complied with the law and 
has leave to sail. In domestic trade the mere departure of a 
vessel from port is called a clearance. 



■ SMITH'S FINANCIAL DICTIONARY. 109 

In the grain trade a consignment of grain or flour shipped 
by lake or ocean is called a clearance. 

Clear day. One entire intervening business day. When 
one clear day is specified in a transaction the transaction does 
not conclude until the second day after it is entered into. 

Cleared inward. Said when the formalities at the custom 
house in connection with an arriving vessel have been com- 
plied with. 

Cleared outward. Said when the formalities at the custom 
house in connection with a departing vessel have been com- 
plied with. 

Clearing. Clearing by a bank is the presentation at the 
clearing house of collectable items (checks, drafts, promissory 
notes, etc.) which it holds, the receipt in exchange of the 
items payable by it, and the settlement of the difference (bal- 
ance) by collection of or payment of the amount of the differ- 
ence. 

Clearing a check or a bill of exchange (draft) consists in 
presenting it for payment. 

Clearing by a stock broker is the operation of delivering 
stocks and receiving pay for them, or the reverse, receiving 
stocks and paying for them. 

Clearing house. See Clearing house of the associated banks 
of New York ; also see New York Stock Exchange clearing 
house. 

Clearing house agent. Same as redemption agent; a name 
given to a bank which is a member of the clearing house and 
clears for another bank which is not a member. 

In New York a bank which is a clearing house member can 
act for a bank which is not a member only by consent of the 
clearing house committee. 

Clearing house balances. The term clearing house balances 
means the payments required from banks to settle differences 
at the clearing house. Banks present the items (checks, 
drafts, etc.), which are collectable by them, receive in ex- 
change the items payable by them, and then receive or pay 
the differences (balances). 

For aditional information see Clearing house of the asso- 
ciated banks of New York. 

Clearing house currency. As one means of securing an 



no SMITH'S FINANCIAL DICTIONARY. 

elastic asset currency which would be entirely safe and at the 
same time responsive to the needs of business it is" proposed 
by some that the privilege of emitting circulating notes be 
taken from the individual banks and delegated to clearing 
houses. This, it is urged, would place behind the notes the 
combined strength of the associated banks and would also do 
away with any danger of reckless emissions of notes by poorly 
managed or weak institutions. 

Further, the advocates of this system think it would be 
easier in this manner to regulate the volume of currency to 
the demands of a community or state than by means of 
numerous issues of banks acting independently. 

Existing clearing houses include only banks in the larger 
cities and their immediate localities. For the purposes of a 
clearing house currency it would be necessary to organize 
country banks into clearing house associations by districts or 
states, as the case might be, in order that all the banks might 
share in the benefits and responsibilities of the system. 

Clearing house gold certificates. In New York these are 
certificates or receipts for gold deposited in the vaults of the 
clearing house or in the Sub-Treasury and are transferable 
by indorsement. They are issued in denominations of $5,000 
and $10,000 and are used only in settling balances at the clear- 
ing house. These certificates, inasmuch as they represent 
actual gold, are counted in the reserves of banks which hold 
them. 

Clearing house loan certificates. These certificates are oc- 
casionally issued by the New York Clearing House Associa- 
tion in an emergency or monetary stringency. They are 
issued against collateral provided by banks obtaining the cer- 
tificates and approved by a committee. They are used in the 
settlement of the daily balances between banks and are re- 
tired as speedily as circumstances will permit. 

These certificates (which in New York are issued in de- 
nominations of $5,000) are practically call loans, at least so 
far as the banks to which they are issued are concerned. 
While demand cannot be peremptorily made upon banks to 
which they have been issued for the redemption (payment) of 
them the banks, nevertheless, may redeem them at pleasure. 
The clearing house committee may, however, as in the case of 



SMITH'S FINANCIAL DICTIONARY. in 

call loans, demand additional collateral (security) should 
there be a depreciation in the value of the collateral deposited. 
There is an incentive for the banks to which the certificates 
are issued to redeem them in the fact that interest at the full 
legal rate has to be paid on them v^hile they are outstanding. 

In 1893 the clearing houses in New York, Boston and Phila- 
delphia issued $63,900,000 in clearing house loan certifi- 
cates. These certificates were used in the settlement of bal- 
ances between the member banks and an equal amount of 
money was released to supply the void made in the circulating 
medium by the heavy gold exports and the withdrawal of 
money from the banks for hoarding and for current hand-to- 
hand use. In some Southern cities the clearing houses issued 
loan certificates in as small amounts as 25 cents for popular 
circulation so urgent was the demand for currency. The ques- 
tion of the legality of this latter action was not raised at the 
time because the crisis was so acute that wisdom seemed to 
forbid any questionings that might make it worse. 

Clearing house money. In Boston it is the, custom of 
banks which are debtor at the clearing house to borrow from 
banks which are creditor for the purpose of settling their debit 
balances. A bank which lends gives to the bank which bor- 
rows from it a draft on the manager of the clearing house and 
the amount of this draft is deducted from the balance due the 
creditor bank. The draft is subsequently surrendered to the 
lending bank to be used by it as evidence of the obligation to 
it of the borrowing bank. A creditor bank may lend part or 
all of its balance. The borrowing bank may retain the amount 
borrowed until it is called for by the lending bank, but it may 
pay it back when it desires. 

The rate of interest charged for the use of the money is 
agreed upon between the lender and the borrower, but it 
generally corresponds to the open market rate for call money 
— that is, money returnable on demand. The rate for clearing 
house money, as it is called, is reported in the newspapers the 
same as the rates for call and time money. 

Clearing house of the associated banks of New York. This 
is the place where a daily settlement of dififerences between 
banks belonging to the New York Clearing House Association 
is made. 



112 SMITH'S FINANCIAL DICTIONARY. 

In clearing each bank presents its total claim against all 
other banks and at the same time the claims of all other banks 
against it are presented. If the result is a credit balance for 
the bank the bank receives it in cash ; if the result is a debit 
balance the bank pays it in cash. The credit balances of all 
banks when combined exactly match the debit balances of all 
banks when combined. 

When a bank's clearings are spoken of the expression means 
the amount of its claims against all other banks — the checks, 
promissory notes and drafts or bills of exchange which it 
holds that are payable by other banks. Its balance is the 
difference in favor of or against it which, as the case may be, 
it receives or pays in cash. The act of a bank's representative 
in presenting the items (checks, drafts, etc.) payable to it by 
other banks and of receiving the items presented by other 
banks and payable by it is called making exchanges. 

Specifically, the matter cleared at the clearing house (the 
items sent to the clearing house for collection) consists of 
checks and also promissory notes and drafts or bills of ex- 
change when they have been certified by the banks at which 
they are payable. This certification is a guaranty by the 
banks at which they are payable that they will be paid — that 
the money has been set aside for their payment. In addition 
to the matter named various kinds of money orders, though 
not authorized, are for the convenience of the banks passed 
through (cleared at) the clearing house. 

Prornissory notes and drafts or bills of exchange when not 
certified are collected by hand — that is, by messenger, who 
presents the notes at the banks at which they are payable. 

With the exception of fractional amounts balances are set- 
tled with legal tender notes (United States notes and Treas- 
ury notes), gold coin. United States gold certificates (which 
are issued against gold coin held in the Treasury) and clearing 
house gold certificates (which are issued against gold coin 
held in the vaults of the clearing house or in the vaults of the 
Sub-Treasury). 

In some clearing houses settlements are made by drafts of 
the manager against debtor banks and in favor of creditor 
banks ; thus no money passes at such clearing houses. 

Also see Bank statement. 



SMITH'S FINANCIAL DICTIONARY. 113 

At the Bankers' Clearing House in London London bills 
and checks are sent in by the banks at different times through- 
out the day and are cleared between 4 and 5 o'clock; country 
checks are cleared at noon. The Bankers' Clearing House 
return (statement) is issued only once a week, on Thursday, 
but it gives the figures for each day. 

Clearing house sheet. The printed form upon which the 
operations of a bank at the clearing house are recorded. Be- 
fore the sheet is taken from the bank to the clearing house its 
claims against other banks are entered on the sheet. Then, 
at the clearing house the claims of other banks against it are 
entered on the sheet and the difference in the totals (called 
the balance) is ascertained. For additional information see 
Clearing house of the associated banks of New York. 

For information as to the sheet used in clearing transac- 
tions in stocks see New York Stock Exchange clearing house. 

Clearing house stocks. Those on the list cleared at the 
New York Stock Exchange clearing house. For information 
see New i ork Stock Exchange clearing house. 

Clearing matter. The matter cleared (presented for collec- 
tion) at a clearing house (of banks). It consists of checks, 
drafts (bills of exchange) and promissory notes (only those 
notes which are payable at specified banks). 

Client. This word is uniformly used on the London Stock 
Exchange instead of customer, which is the word commonly 
used on the New York Stock Exchange. 

Clique. A name given to a combination of speculators 
formed for the purpose of manipulating a stock or a com- 
modity or a market as a whole. 

Close corporation. Name given to an incorporated com- 
pany the stock of which is held by a few persons and is not 
for sale. When a private business is continued as an incor- 
porated company instead of a partnership and stock is al- 
lotted to each partner for his interest or share in the business 
the company is called a close corporation. An entirely new 
business or enterprise, however, may be and often is started 
as a close corporation instead of a partnership. Usually there 
is an agreement among the stockholders whereby each is pro- 
hibited from disposing of or transferring his stock without the 
consent of the others. 



114 SMITH'S FINANCIAL DICTIONARY. 

What in the United States is known as a close corporation 
is in Great Britain termed a private company. 

Closed. Said when a transaction is finally completed. 

Closed for dividend. Means that the stock transfer books 
are closed pending the payment of a dividend. In Great Bri- 
tain the term shut for dividend is sometimes used. For addi- 
tional information see Books closed. 

Closed out. Finally disposed of. For instance, when the 
last of a lot of stock that has been carried (or held) is sold it 
has been closed out. 

Also, when the account of a speculator has been liquidated 
without his consent because of failure on his part to provide 
additional margin he has been closed out, or more correctly 
speaking, his account has been closed out. 

Closed trade. A speculative term, meaning a trade (in a 
stock or in grain, cotton, coffee, etc.) that has been completed. 
For instance, if a speculator who bought has sold the trade is 
closed ; or, if a speculator who sold short has bought back the 
trade is closed. Also see Open trade. 

Close prices. Prices near together. For instance, a bid 
and asked price is close when separated by only a small frac- 
tion, as 100 bid and lOO i-8 asked. Again, the term applies to 
a stock or a commodity in which the fluctuations in the 
price are small or narrow. 

In mercantile dealings a close price is one very near to cost 
— one that allows of only a minimum profit. 

The term close price as used on the London Stock Ex- 
change signifies a small difference between the price at which 
a jobber will buy a stock and the price at which he will sell 
the same stock ; see Jobber. 

Closing prices. On the New York Stock Exchange and on 
other American exchanges these are the prices at which the 
last sales are made. 

On the London Stock Exchange closing prices are the prices 
at which business is done or at which stocks are quoted at 
the time when the house (exchange) is closed (4 p. m. ) ; offi- 
cial prices are those at which stocks and shares are quoted in 
the official list, which is made up at 3 p. m. on ordinary days 
and at i p. m. on Saturdays. "Street" prices are the prices at 



SMITH'S FINANCIAL DICTIONARY. 115 

which stocks are last quoted in the latest dealings in Shorter's 
court or Throgmorton street. 

CMP. As printed on the tape by the stock ticker these 
letters mean compromise. 

CN. As printed on the tape by the stock ticker these let- 
ters mean consolidated or consols. 

Co. Abbreviation of the word" company; as a prefix it 
means "together with," as co-assignee, co-administrator, etc. 

Coaching traffic. English term for what in the United 
States is called passenger traffic, or in other words, the pass- 
enger business of a railroad. 

Coal. See Anthracite coal ; see Bituminous coal. 

Coalers.' A colloquial name for the stocks of the anthracite 
coal-carrying railroads. 

Coal hole. A name given to the basement of a former 
building at No. 23 William street, New York, where calls of 
stocks were held and dealings conducted by outside brokers 
(brokers not members of the New York Stock Exchange) in 
1862 and succeeding years. These brokers had no organiza- 
tion, but paid a fee to the owner of the building for the right 
to enter the Coal hole. Reports of their transactions, how- 
ever, were printed in the newspapers under the caption ''Sales 
at the Public Stock Board." 

For information as to the present manner in which outside 
brokers conduct business ; see Outside market. , 

Coal stocks. The stocks of the leading anthracite coal-car- 
rying railroads are those of the Central of New Jersey, Dela- 
ware, Lackawanna & Western ; Delaware & Hudson, Lehigh 
Valley, and Reading railroads. The Erie; New York, On- 
tario & Western, and Pennsylvania railroads also are large 
carriers of anthracite coal, but these roads are more particu- 
larly classed as trunk lines. 

C. O. D. These letters stand for collect on delivery. 

Code. An arrangement of words standing for phrases, 
numbers or quotations so that telegraph and cable despatches 
may be sent in private and in condensed form. 

Coin. A piece of metal or any alloy of metals stamped by 
public authority for use as money 

United States gold and silver coins are 900 fine — that is, 
900 per cent pure gold or pure silver. The gold coins consist 



ii6 SMITH'S FINANCIAL DICTIONARY. 

of 900 parts gold alloyed (mixed) with 10 parts silver and 90 
parts copper; the silver coins consist of 900 parts silver and 
100 parts copper. The nickel coin (the 5-cent piece) consists 
of 25 parts nickel and 75 parts copper. The bronze coin (i 
cent) consists of 95 parts copper, 3 parts tin and 2 parts zinc. 

The gold coins now minted are the double-eagle ($20), 
eagle ($10), half-eagle ($5) and quarter-eagle ($2.50). 

The silver coins now minted are the dollar, half-dollar, quar- 
ter or quarter-dollar and dime (10 cents). 

The ratio of the gold dollar to the silver dollar is 15.988 to i 
(practically 16 to i). 

The coinage of gold in the United States is free — that is, 
gold in any form suitable for refining may be deposited in a 
mint or assa}^ office belonging to the government and after 
the value of it has been determined by refining and conver- 
sion into bars the owner will be paid for it in gold coin. A 
charge is made for' refining the gold, but it is small. 

The coins of Great Britain are as follows : 

The gold coins are the sovereign ( £ i or 20 shillings) , 
equal to $4.86.65, and the half sovereign (10 shillings), equal 
to $2.43.32. Two-pound (equal to $9.73.31) and five-pound 
(equal to $24.33.28) pieces are also coined, but in very small 
numbers and not for general circulation. 

The silver coins are the crown (5 shillings), equal to 
$1,21.66; the double-florin (4 shillings), equal to 97.33 cents; 
the half-crown (2 1-2 shillings), equal to 60.83 cents; the florin 
(2 shillings), equal to 48.66 cents; the shilling (12 pence), 
equal to 24.33 cents; the sixpence or half-shilling, (6 pence), 
equal to 12.16 cents; the three-penny piece or quarter-shilling, 
equal to 6.08 cents. Very few crowns and double-florins are 
coined. Four, two and one-penny silver pieces are coined 
merely for the cabinets of numismatists and for "Maundy 
money," an ancient charitable fund. 

The minor coinage includes the penny (about 2 cents), the 
half-penny (about i cent) and the farthing (about 1-2 cent). 
These pieces are of bronze. 

British gold coins are .916 2-3 fine ; the silver coins are .925 
fine. The ratio of gold and silver coins is 14.2878 to I. 

Individuals have the right to deposit gold in the mint and 
to obtain therefor £3, 17 shillings 10 1-2 pence per ounce of 



SMITH'S FINANCIAL DICTIONARY. 117 

metal of the standard fineness, but the fact that there is con- 
siderable delay in coining has caused it to become the prac- 
tise to deposit gold with the Bank of England, which pays at 
once £3, 17 shillings 9 pence, the difference of i 1-2 pence 
being charged by the bank for interest, etc. The difference is 
called demurrage. The bank act of 1844 requires the bank to 
receive gold at £3, 17 shillings 9 pence. 

Twenty days elapse between the time when gold is deliv- 
ered to the mint and the time when it is returned in the shape 
of sovereigns or other coins. The fee of i 1-2 pence per ounce 
which the Bank of England is allowed to charge when it gives 
sovereigns or other gold coins in exchange for bars or gold in 
other forms is just equal to 20 days' interest at 3 per cent. 

In the Cornwall (England) tin mines to coin means to weigh 
and stamp blocks of tin. 

For the coins of the countries of the world see Moneys of 
the world. 

Coinage. The making of coins for use as money. The sys- 
tem of coins used in a country also bears the name coinage. 

The coinage of the United States was begun in 1793, when 
the gold eagle ($10), silver dollar, silver half-dollar, silver 
quarter-dollar,-silver dime (10 cents) and the copper cent and 
half-cent were issued. 

Coinage act of 1873. This was the act of February 12, 1873, 
which discontinued the coinage of the silver dollar by omitting 
it from the list of coins authorized to be minted (manufact- 
ured) by the government. 

The metal in the silver dollar was at the time worth two 
cents more than the metal in a gold dollar; in other words, a 
silver dollar was worth $1.02 in gold money. Coinage of the 
silver dollar was resumed under the Bland-Allison act of 
February 28, 1878. 

Coining rate or value. This term, as a fact, applies only to 
silver. Gold has a fixed value and when a ratio is established 
between gold and silver gold is made the basis and so many 
parts of silver are counted as equal to i part of gold. In 
other words, the coining rate of silver Is the valuation as com- 
pared with gold at which silver is coined, In contradistinction 
to Its actual value as bullion. 

The coining rate or value of silver In the United States Is 



ii8 SMITH'S FINANCIAL DICTIONARY. 

$1.29.29 per ounce of fine (pure) silver, which makes the ratio 
between silver and gold 15.988 to i (practically 16 to i). 

Coin of the realm. The money of the country; not neces- 
sarily the actual metal coins of the country, but its money 
which passes current. The term is a figure of speech. 

Coin value. The value of a metal after its conversion into 
coins, as distinguished from the bullion value, which is the 
commercial or market value of the metal. 

Collateral. A security pledged for the payment of a loan or 
an obligation. 

Collateral loan. Such a loan is a loan on a promissory note 
secured by collateral. 

The collateral in the case of a Wall Street loan consists of 
securities (stocks and bonds). It is the custom of banks and 
other lenders to accept securities as collateral at 80 per cent 
of their market value. If the market value of the securities 
declines subsequent to the making of a loan the lender may 
call for (demand) additional securities. The replenishment 
of the collateral with additional securities is called remargin- 
ing. If additional securities are not provided on demand the 
lender has the right to demand payment of the loan, no matter 
if it is a time loan and has not matured. If the loan is not 
paid the lender may without further notice sell the securi- 
ties by public offering (on the stock exchange or by auction). 
If the sale of the securities does not realize the amount of the 
loan the lender may take judgment for the balance and col- 
lect it by process of law. 

It is the same with a call loan as with a time loan — the addi- 
tional securities must be provided or the loan repaid or the 
securities may be sold and judgment taken for any deficiency. 

Except when there is an agreement permitting it a lender 
has no right to retain collateral to secure any loan but the one 
for which it was to serve as security. It may be recovered by 
suit and the borrower may also recover any loss which he may 
have suffered from the unjustifiable detention of his securities. 

In New York securities pledged as collateral are said to 
have been hypothecated. 

In London securities pledged as collateral are said to have 
been pawned. 

Collateral note. A promissory note the payment of which 



SMITH'S FINANCIAL DICTIONARY. 119 

is secured by pledge of collateral, which in the case of a Wall 
Street loan consists of securities (stocks and bonds). 

The following form is customarily used for a Wall Street 
loan. The form may be used for either a time or a call loan 
by inserting in the blank space at the beginning of it the date 
when payable if it is a time note or the word "demand" if it 
is a call note : 

$ New York, igo 

On Without Grace, for value received, the under- 
signed promise to pay to THE THIRTY-SEVENTH NATIONAL 
BANK OF THE CITY OF NEW YORK, or Order, at its Banking Office 
in New York City, in funds current at the New York Clearing House, with 

interest from the date hereof at the rate of per cent per annum 

(payable quarterly on March 31, June 30, September 30 and December 31) 

Dollars, 

having deposited with the said Bank as collateral security for the payment 
of this and any other liability or liabilities of the undersigned or of the 
guarantors hereof to the said Bank, due or to become due, or which may- 
hereafter be contracted or existing, the following property, viz : 



of an estimated market value of $ , and the undersigned also 

hereby giving to the said Bank a lien for the amount of all the said lia- 
bilities upon all the property or securities at any time given unto or left in 
the possession or custody of the said Bank by or for the undersigned, for 
safe keeping or otherwise, or in which the undersigned has (or have) any 
interest, and also upon the balance of the deposit account of the under- 
signed with the said Bank, existing from time to time. 

In case the securities at any time pledged for any of the above named 
liabilities should decline in market value or for any reason become unsatis- 
factory to the said Bank, the undersigned agree to deposit with the said 
Bank additional securities to the satisfaction of the said Bank; and in case 
of failure so to do forthwith, this note shall become at once due and pay- 
able without demand of payment thereof, and the said Bank may imme- 
diately sell and apply the said securities in the manner and with the effect 
as hereinafter provided. 

The undersigned do hereby authorize and empower the said Bank, at 
its option, at any time, to appropriate and apply to the payment and ex- 
tinguishment of any of the above named obligations or liabilities, whether 
now existing or hereafter contracted, any and all moneys now or hereafter 
in the hands of the said Bank, on deposit or otherwise, to the credit of or 
belonging to the undersigned, whether the said obligations or liabilities are 
then due or not due ; and further agree that in the event of the insolvency 
of the undersigned all the said obligations and liabilities shall, at the option 



120 SMITH'S FINANCIAL DICTIONARY. 

of the said Bank, become and be immediately due and payable without 
demand of payment. 

The said Bank is hereby authorized, upon the non-payment of any of 
the liabilities above mentioned when due, to sell, assign and deliver the 
whole of the said securities, or any part thereof, or any substitutes therefor, 
or any additions thereto, or any other securities or property given unto or 
left in the possession or custody of the said Bank by or for the under- 
signed, at any Broker's Board or at public or private sale, at the option of 
the said Bank, without either advertisement or notice, which are hereby 
expressly waived. 

If such securities or property are sold at public sale, the said Bank may 
itself purchase the whole or any part thereof, free from any right of re- 
demption on the part of the undersigned, which is hereby waived and re- 
leased. 

In case of sale for any cause, after deducting all costs or expenses of 
every kind for collection, sale or delivery, the said Bank may apply the 
residue of the proceeds of the sale or sales so made, to pay either one or 
more or all of the said liabilities to the said Bank, whether then due or 
not, as it shall deem proper, making proper rebate for interest on liabilities 
not then due, and returning the overplus, if any, to the undersigned who 
agree to be and remain liable to the said Bank for any deficiency arising 
upon such sale or sales. 

(Signed) 

On the back of the form is printed the following condition : 

In consideration of the making, at the request of the undersigned, of 
the loan evidenced by the within note, upon the terms thereof, and of the 
sum of one dollar, the undersigned, hereby guarantee to The Thirty- 
seventh National Bank of the City of New York, its successors, in- 
dorsees or assigns, the prompt payment of the said loan when due, and 
hereby consent that the securities for the said loan may be exchanged 
or surrendered from time to time, or the time of payment of the said loan 
or any of the securities therefor extended, without notice to or further 
assent from the undersigned, and that the undersigned will remain bound 
upon this guarantee notwithstanding such changes, surrender or extension. 
The undersigned waive demand of payment from the maker of said 
note, and also waive notice of non-payment of the said loan or note, and 
also waive notice of any sale of the collateral securities held for the said 
note. 

A note in the foregoing form is also known as a stock note 
because the collateral provided consists of stocks (it may, how- 
ever, consist of bonds or partly of bonds). Also, because 
of its stringent provisions the name "ironclad note" is some- 
times applied to it. 

Collateral trust. A trust fund or obligation secured b}' col- 
lateral. 



SMITH'S FINANCIAL DICTIONARY. 121 

Collateral trust bond. A bond which is secured by collat- 
eral held in trust. 

A railroad requiring money may issue collateral trust bonds 
and place in trust as security for them stocks by the owner- 
ship of which it controls other railroads. 

Collection. Same as collection item ; a general name in 
banking for promissory note, draft or check which a bank holds 
for collection from another bank or from an individual. 

In general use the term collection means obtaining pay- 
ment. 

Collection charge. A charge made by banks for the collec- 
tion of checks, drafts, promissory notes, etc., which are pay- 
able (collectable) in other places. 

The rule of the New York Clearing House Association, 
which applies not only to its members but to other banks 
which clear through its members, is that for items collected 
for the account of or in dealings with the governments of the 
United States, the state of New York and the city of New- 
York and for items payable in the cities of Boston, Provi- 
dence, Albany, Troy, Jersey City, Bayonne, Hoboken, Newark, 
Philadelphia and Baltimore the charge shall be discretionary 
with the collecting bank. 

For items from whomsoever received (except on those points 
designated as discretionary) payable at points in Connecticut, 
Delaware, District of Columbia, Indiana, Illinois, Kentucky, 
Maine, Maryland, Massachusetts, Michigan, Missouri, New 
Hampshire, New Jersey, New York, Ohio, Pennsylvania, 
Rhode Island, Vermont, Virginia, West Virginia and Wis- 
consin the collecting banks shall charge not less than i-io of 
I per cent of the amount of the items respectively. 

For items from whomsoever received payable at points in 
Alabama, Arizona, Arkansas, California, Colorado, Florida, 
Georgia, Idaho, Indian Territory, Iowa, Kansas, Louisiana, 
Minnesota, Mississippi, Montana, Nebraska, Nevada, New 
Mexico, North Carolina, North Dakota, Oklahoma, Oregon, 
South Carolina, South Dakota, Tennessee, Texas, Utah, Wash- 
ington, Wyoming and Canada the collecting banks shall 
charge not less than 1-4 of i per cent of the amount of the 
items respectively. 



122 SMITH'S FINANCIAL DICTIONARY. 

In case the charge upon any item at the rate above specified 
does not equal lo cents the collecting bank shall charge not 
less than that sum ; but all items received from one party at 
the same time and payable at the same place may be added 
together and treated as one item for the purpose of fixing the 
amount chargeable. 

Collection item. Same as collection; a general name in 
banking for a promissory note, draft or check which a bank 
holds for collection from another bank or from an individual. 

Collection note. A note delivered to a bank by a depositor 
in the bank for collection the amount of which is to be cred- 
ited to the depositor when payment is made. 

Colonial stocks. The name applied to the stocks (or bonds) 
of the British colonies. 

Combine. An abbreviation or contraction of the word com- 
bination ; it applies to a combination of separate concerns or 
interests by an understanding or compact, as a pool (see 
Pool), but not by an actual consolidation. To an actual con- 
solidation when the purpose is to control a particular industry 
or business the term trust is generally applied. 

The term ring is sometimes mistakenly used in place of 
combine ; specifically ring refers to a clique or coterie of per- 
sons and not to a combination of concerns or interests. 

Combine is a newer term than either ring or trust and has 
been rather loosely used. 

Coming out. The London Stock Exchange term for the 
issuance of securities of a new company or the issuance of 
new securities by an old company. See For the coming out. 

Commerce. The exchange of goods, products or property 
of any kind, especially such exchange on a large scale, as be- 
tween states or nations ; extended trade. 

Commercial. Of or pertaining to or of the nature of com- 
merce ; mercantile ; employed in or devoted to trade or com- 
merce. 

Commercial agency. Same as mercantile agency ; a con- 
cern which with the cooperation of merchants, manufacturers, 
bankers and others ascertains, records and makes known to its 
patrons or subscribers the financial standing, general busi- 
ness reputation and credit ratings of individuals, firms and 
corporations engaged in mercantile and industrial enterprises. 



SMITH'S FINANCIAL DICTIONARY. 123 

In addition it compiles reports on the state of trade and on 
commercial and financial operations generally, including rec- 
ords of failures, judgments, etc. 

Commercial bar. This is a bar (ingot) of pure gold or 
silver. The market price of a commercial bar is usually frac- 
tionally lower than that of a government bar (a bar turned out 
by a government assay office). 

Commercial bill or commercial bill of exchange. A bill 
(draft) drawn against a shipment of products or goods ; that 
is, a draft drawn upon the one to whom the products or goods 
are consigned. See Domestic exchange ; also see Foreign ex- 
change. 

Commercial credit. An estimate of the ability and dispo- 
sition of individuals, firms or corporations to meet their busi- 
ness engagements. 

Commercial letter of credit. A commercial letter of credit 
is an instrument issued by a banker which authorizes the 
holder to draw upon the issuing banker at sight or otherwise 
to an amount not exceeding the amount named in the letter. 
It is stipulated in the body of the instrument that the amount 
of all drafts negotiated under it shall be indorsed on it so that 
it shall always show how much of the credit remains. The 
names of bankers in various parts of the world (correspondents 
of the issuing banker) who wall cash drafts so drawn are print- 
ed on the letter. A considerable part of the foreign purchases 
made by merchants is effected through letters of credit. 

Commercial paper. Negotiable instruments calling for the 
payment of money, issued in the course of business, as bills of 
exchange (drafts), promissory notes, etc. 

As generally interpreted commercial paper means accept- 
ances (drafts or bills of exchange which have been accepted) 
and promissory notes. Under the head commercial paper 
properly come drafts drawn against purchasers of merchandise 
or products and promissory notes made by them ; or drafts 
drawn against manufacturers for materials supplied and prom- 
issory notes made by them. 

Accommodation paper is included under the head com- 
mercial paper when it is made (in the case of a promissory 
note) or drawn (in the case of a draft or bill of exchange) by 
a concern or individual for use in mercantile or commercial 



124 SMITH'S FINANCIAL DICTIONARY. 

business. Accommodation paper consists of drafts or bills of 
exchange drawn, accepted or indorsed or of promissory notes 
made or indorsed without consideration by one party to enable 
another to obtain credit or to raise money. 

A promissory note that has been received for goods sold 
and that has in order to effect its discount (sale) been in- 
dorsed by the party who received it is known as a bill receiv- 
able. 

Single-name paper is paper that is not indorsed; double- 
name paper is paper with an indorsement. 

Another designation for single-name paper is straight paper ; 
in fact it is a common practise to speak of paper without in- 
dorsement as straight paper. 

Negotiable drafts and notes by reason of the fact that they 
are negotiable are themselves articles of commerce — articles 
which may be bought and sold the same as commodities. The 
varieties of commercial paper are designated by trade names. 
For instance, the paper made (issued) or the paper indorsed 
and sold by dry goods commission houses is known as com- 
mission house paper ; that made by cotton and woolen mills is 
known as mill paper, and so on. 

Bank paper (an abbreviation of bankable paper) is the name 
applied to paper that is of such good quality that a bank will 
readily discount (buy) it. Accordingly, it also applies to 
paper when it bears the indorsement of a bank. The usual 
manner in which a bank becomes the indorser of commercial 
paper is in rediscounting. First it buys (discounts) the paper 
and then it sells (rediscounts) it if it needs cash or if it can 
make a satisfactory profit by a sale. The paper brings a 
better price (the discount is less) with the bank's indorsement 
than it would bring without the bank's indorsement. 

Commercial paper when in the form of a promissory note 
does not as a rule bear interest. The discount in the first in- 
stance cannot under the law be greater than the amount of 
legal interest on it — that is to say, the commercial paper 
dealer or the bank which takes the note from the maker can- 
not deduct more than the legal rate of interest, although the 
dealer or bank may subsequently dispose of the paper at any 
price he or it sees fit. 



SMITH'S FINANCIAL DICTIONARY. 125 

The business of buying and selling commercial paper is an 
extensive one. Many individuals as well as banks are en- 
gaged in it. Individual dealers buy from makers at one rate 
of discount and sell to banks or other dealers at a lower rate. 
For instance, they will buy at a discount of 5 per cent and re- 
sell at a discount of 4 per cent ; in such an operation they make 
a profit of i per cent. Banks also resell to other banks. 

If negotiable commercial paper pledged to a bank as secu- 
rity for a loan or debt falls due and the bank fails to present it 
for payment arid to have it protested if dishonored the bank 
is liable to the owner for the full amount of the paper. 

Sometimes the owner of commercial paper has the right to 
demand payment before maturity, as, for instance, when a 
draft has been protested for non-acceptance and proper notice 
has been served the holder may proceed against the drawer 
and indorsers. 

It is a common practise of merchants to make out notes 
payable to themselves and have them discounted. There is 
often a profit in such a transaction. They may be able to 
have their paper discounted at 4 per cent, or in other words, 
may be able to sell it at a discount of 4 per cent and with the 
cash thus obtained may be able to discount their own bills at 
5 per cent, by which is meant that by paying cash for the 
goods they purchase they may be able to secure a discount of 
5 per cent. In such a case there is a profit of i per cent in hav- 
ing their own paper discounted and discounting their own 
bills. 

The Bank of France requires three names to paper ; the Im- 
perial Bank of Germany requires two names. 

Commercial traveler. An agent or representative of a 
mercantile or manufacturing concern who travels and solicits 
orders. A colloquial name for a commercial traveler is 
drummer. 

Commission. A fee for services in buying and selling. 

The commission charged by a broker on the New York 
Stock Exchange for executing an order is 1-8 of i per cent of 
the par value of the securities for a sale and the same for a 
purchase, or as it is commonly expressed, 1-8 each way. For 
a round-trade (buying and then selling, or the reverse, selling 
and then buying) the commission on 100 shares of stock or 



126 SMITH'S FINANCIAL DICTIONARY. 

$io,ooO'of bonds is 1-4 of i per cent or $25 (1-8 of i per cent 
or $12.50 each way). 

Also see Three and a shilHng; also see Two-dollar broker. 

Outside brokers in stocks have no fixed commissions, al- 
though their charges are usually the same as those of mem- 
bers of the New York Stock Exchange. Brokers in the out- 
side (curb) market often take an order net, which means that 
the customer will deliver or receive the stock, as the case may 
be, at a fixed price. The broker receives no commission but 
is allowed to make as much on the transaction for himself as 
he can. 

The commission on mining stocks, except on the New York 
Stock Exchange, is based on the market value of the stocks. 

Commissions for round trades (both buying and selling, or 
the reverse, selling and buying) in commodities are : Grain, 
1-4 of I cent per bushel or $12.50 on 5,000 bushels ; lard, 5 
cents per tierce or $12.50 on 250 tierces (85,000 pounds) ; 
pork, 5 cents per barrel or $12.50 on 250 barrels ; short ribs, 
2 1-2 cents per 1,000 pounds or $12.50 on 50,000 pounds; 
cotton, 1,0 cents per bale or $10 on 100 bales (50,000 pounds) ; 
coffee, 8 cents per bag or $20 on 250 bags (32,500 pounds) ; 
silver bullion, 1-4 of I cent per ounce or $2.50 on 1,000 ounces. 

The word commission also means an order or an act en- 
trusted to a broker (or agent) to execute or perform, but the 
word invariably used is order. 

On the London Stock Exchange no fixed commission is 
charged, but 1-8 per cent each way (1-8 for buying and the 
same for selling) is the customary charge on stock (as dis- 
tinguished from shares ; see Stock) when no commission is 
charged for carrying over. On shares the commission varies 
according to the price. Active speculative accounts when 
opened and closed during a fortnightly period are sometimes 
undertaken for 1-16 each way. The charge for carrying over 
bargains is usually one-half the amount charged for opening 
them; when a carry-over commission is charged the bar- 
gain is generally closed without charge. 

On the Paris Bourse the commission is fixed at about 1-8 
per cent each way. 

Commission broker. One who executes orders for a com- 
mission. 



SMITH'S FINANCIAL DICTIONARY. 127 

Commission house. A brokerage house which deals only 
for customers and does not speculate for its own account. 

Commission merchant. One employed to sell goods for 
another on commission ; sometimes called factor or consignee. 
, . Commitment. An act of engagement or pledging; the act 
of giving an order to buy or sell, as stocks. 

Committee for general purposes. The general governing 
body of the London Stock Exchange, consisting of 30 persons, 
who are elected on March 25 each year by the members of the 
exchange. 

Commodity. An article of trade. Grain, cotton and coffee 
are commodities. 

Common carrier. A railroad or steamship line or any carry- 
ing company which transports goods for hire. 

Common stock. Stock not preferred as to dividends or 
assets ; sometimes called general or ordinary stock. 

In Great Britain when an ordinary (common) stock has 
been divided into two parts one part, called deferred, receives 
no dividend until the other part, called preferred, has received 
a dividend at a fixed rate. The deferred stock is called A 
stock and the preferred stock is called B stock. 

This B or preferred stock is not the same as preferred stock 
in the United States. What in the United States is called pre- 
ferred stock is in Great Britain called preference stock and 
preference stock in Great Britain may be divided into two 
or more classes called first preference, second preference, etc., 
just as preferred stock in the United States may be divided 
into two or more classes called first preferred, second pre- 
ferred, etc. When, however, there is but one class of prefer- 
ence stock ahead of an ordinary stock in Great Britain the B 
or preferred stock is equivalent to second preferred stock in 
the United States. 

Community of interest. This term means joint ownership 
or joint control for the purpose of maintaining harmonious 
relations. 

When, for instance, one set of capitalists in control of one 
railroad acquire an interest in a competing railroad with rep- 
resentation in its board of directors and the set of capitalists 
in control of this second railroad acquire an interest in the 
other railroad with representation in its board of directors, 



128 SMITH'S FINANCIAL DICTIONARY. 

with the object of mutual benefit, a community of interest is' 
established. Also, when two competing railroads together 
acquire control of a third line connecting with both a com- 
munity of interest is established if the object be mutual benefit. 

Commutation or commuting. Same as compounding; the 
payment of several successive obligations by substituting a 
lump sum. 

Company. In the ordinary acceptation of the word com- 
pany (referring to a joint-stock company) means the same as 
corporation. A business company (corporation) is an artifi- 
cial body, created by law, composed of individuals united under 
a common name, with power of succession, so that changes in 
the individuals composing it do not affect the body itself; in 
law it is treated as a person. 

The capital stock of a company (that is, a joint-stock com- 
pany) is divided into shares of equal amount, as, for instance, 
a company whose capital stock of $100,000,000 is divided into 
shares of $100 each. 

If the financial statement of a stock company is published 
in such form as to misrepresent its real condition any one 
who is misled to his damage may recover his loss from the 
directors whether he is a stockholder or not. 

In Great Britain a distinction is made between stock and 
shares ; see Stock. 

Company meeting. English designation for a meeting of 
the shareholders (stockholders) of a company. 

Comparison. At the close of business on the New York 
Stock Exchange messengers employed by brokers compare 
the day's transactions. If A sells 100 shares of stock to B 
A's messenger ^delivers at the office of B a memorandum of 
the transaction, which is called a deliver ticket, and obtains 
acknowledgment on another corresponding memorandum, 
which is called a receive ticket. It is the duty of the seller to 
compare or to endeavor to compare each transaction at the 
office of the buyer not later than one hour after the closing of 
the exchange. It is the duty of the buyer to investigate be- 
fore 10 a. m. of the day after the purchase any transaction 
which has not been compared by the seller. 

Compensatory damages. The amount adjudged as equiva- 
lent to the loss sustained. 



SMITH'S FINANCIAL DICTIONARY. 129 

Composition. An agreement between a debtor and his cred- 
itors by whicR the latter accept in full payment of their claims 
a portion of the amounts due. The sum or rate paid or 
agreed to be paid in compounding with creditors also is called 
composition. 

A composition agreement is strictly interpreted by the 
courts. For instance, A owes B $100 and says to iiim, "If you 
will release that debt I will pay you $10 a week for the next 
five weeks." B agrees. If A fails to make the payment in any 
one of the five weeks B is no longer bound by his agreement. 
He may rescind the agreement immediately and sue for so 
much of the $100 as he has not received in the weekly instal- 
ments, which if kept up would have discharged the debt for $50. 

Composition deed. An agreement between a debtor and 
his creditors effecting a composition or compromise, usually in 
a manner which binds the creditors. not to molest the debtor. 

Compound arbitration of exchange. A calculation based 
on the rates of exchange between four or more places to de- 
termine the difference in the money values of the different 
countries ; or, a calculation based on the money values of four 
or more places to determine the ratio of exchange between the 
different places. When only three places are involved in the 
calculation it is called simple arbitration of exchange. 

For additional information see Arbitration of exchange. 

Compounding. Same as commuting or commutation ; the 
payment of several successive obligations by substituting a 
lump sum. 

Compounding differences. Settling a contract without ex- 
ecuting its complete terms. For example, A buys 100 shares 
of stock at 100 from B, the stock to be delivered in 30 days. 
At the end of 30 days the price of the stock is 98 and A pays 
B $200 instead of taking the stock. 

Compound interest. Interest on interest after it has be- 
come due and has been added to the principal. 

The interest on deposits in savings banks, for instance, is 
computed at regular intervals and added to the principal and 
then interest continues on the whole. Many cammerclal 
banks allow interest on daily balances and thus as interest is 
computed it is added to the principal. 

Compound interest is not sanctioned by law in New York 



ISO SMITH'S FINANCIAL DICTIONARY. ' 

state except by express agreement and the agreement must 
be made after the simple interest has accrued and upon a 
new consideration. The correct method in a case of payment 
by instalment is by what is known as Chancellor Kent's rule: 
"When partial payments have been made, apply the payment, 
in the first place, to the discharging of the interest then due. 
If the payment exceeds the interest, the surplus goes towards 
discharging the principal, and the subsequent interest is to be 
computed on the balance of the principal remaining due. If 
the payment be less than the interest the surplus of interest 
must not be taken to augment the principal, but the interest 
continues on the former principal until the period when the 
payments, taken together, exceed the interest due, and then 
the surplus is to be applied towards discharging the principal, 
and interest is to be computed on the balance as aforesaid." 

A compound interest table showing the accumulation of 
principal and interest on $i is printed on the two succeeding 
pages, the interest being compounded (or added to the prin- 
cipal) semi-annually. 



SMITH'S FINANCIAL DICTIONARY 



131 



COMPOUND INTEREST TABLE. 

Interest compounded semi-annually. 

Table continued on next page. 



Kiimber of Years. 



1 per 
cent. 



2 per 



.3 per 
cent. 



4 per 
cent. 



41-2 iier 
cent. 



I 
2 
3 

4 

S_ 

6 

7 
8 

9 
10 



.0100 
.0201 
•0303 
.0407 
.0511 



$1.0201 
1 .0406 
1.0615 
1.0828 
1. 1045 



$1.0302 
1. 0613 
1.0934 
1. 1264 
1. 1605 



$1.0404 
1.0824 
1.1261 

1-1715 
1.2188 



$1-0455 
1.0930 

1. 1438 
1. 1948 
1. 2481 



.0616 
.0723 
.0830 
0949 
,1059 



$1.1267 
1.1494 

1-1725 
1.1961 
1. 2201 



$1.1956 
1.2317 
1.2689 
1-3073 
1-3463 



$1.2681 

I-3193 
1.3726 
1. 4281 
1.4858 



$1.3004 

1-3643 
1.4264 

I-4913 
1-5592 



II 

12 

13 

14 

I5_ 

16 

17 
18 

19 
20 



.1170 
.1281 

•1394 
-1508 
.1623 



$1.2446 
1.2696 
1.2952 
1. 3212 
1-3478 



$1-3875 
1-4295 
1.4727 
1.5172 
1-5630 



$1.5458 
1 .6082 
1.6732 
1.7408 
1.8111 



$1.6301 
1.7044 
1.7820 
1.8631 
1.9479 



.1740 

.1857 
.1976 
.2096 
.2218 



$1.3748 
1 .4025 

1-4307 
1-4594 
1.4888 



$1.6103 
1.6589 
1. 7091 
1.7607 
1.8140 



$1.8843 
1.9604 
2.0396 
2.1220 
2.2078 



$2.0365 
2.1272 
2.2240 
2.3252 
2.4310 



21 
22 
23 
24 

?i. 
26 
27 
28 

29 
30 



2341 
2465 
2590 
2716 
2843 



$1.5187 
1.5492 
1.5804 
1.6121 
1-6445 



$1.8686 
1-9253 
1-9835 
2.0434 
2.1052 



$2.2970 
2.3898 
2.4863 
2.5868 
2.6913 



$2-5415 
2.6572 
2.7781 
2.9045 
z.02,67 



2973 
3103 

3235 

3501 



$1.6776 
1.7113 

1-7457 
1.7808 
1. 8166 



|>2.I 
2.2344 
2.3019 

2.3715 
2.4432 



$2.8006 
2.913I 
3-O318 

3-1543 
3.2818 



$3-1749 
3-3193 
3-4703 
3.6282 

3-7933 



31 

2,2 

33 

34 

35_ 

Z6 

Z7 

38 

39 

40 



•3637 
-3773 
■3911 
.4051 
.4192 



$1.8430 
1.8800 
1. 91 76 
1.9562 
1.9955 



$2.5170 

2.5931 
2.6715 

2.7522 
2.8354 



$3.4144 
3-5523 
3-6958 

3-8451 
4.0005 



$3.9660 
4-1465 
4-3351 
4-5324 
4-7387 



•4334 
.4478 
-4623 
-4770 
.4918 



$2.03 =;6 
2.0765 
2.1183 
2.1608 
2.2043 



$2.9211 

3.0094 
3.1004 

3-1941 
3.2907 



$4.1621 
4-3302 
4-5052 
4.6872 
4.8766 



$4-9543 
5-1798 
5-4146 
5.6610 
5-9288 



41 

42 

43 

44 

45. 

46 

47 

48 

49 

50 



•5067 
-5218 

-5371 
-5545 
-5701 



$2.2486 
2.2938 

2.3399 
2.3869 

2.4349 



$3-3901 
3.4926 
3-5982 
3.7070 
3-8191 



$5-0736 
5-2785 
5.4928 

5-7147 
5-9456 



$6.1986 
6.4807 
6.7756 
7.0840 
7.4062 



-5858 
.6017 
.6178 
-6330 
•6494 



$2.4838 I 

2.5338 I 

2.5847 I 

2.6367 I 

2.6897 I 



$3-9345 
4.0432 

4-1655 
4.2914 
4.4211 



$6.1858 

6.4357 
6.6957 
6.9662 
7.2477 



$7-7430 
8.0954 
8.4638 
8.8490 
9.2516 



132 



SMITH'S FINANCIAL DICTIONARY. 



COMPOUND INTEREST TABLE. 

Interest compounded semi-annually. 

Table continued from preceding page. 



Number 














of 


5 per 


6 per 


7 per 


7 3-10 per 


8 per 


10 per 


Years. 


cent. 


cent.. 


cent. 


cent. 


cent. 


cent. 


I 


$1.0506 


$1.0609 


$1.0712 


$1.0743 


$1.0816 


$1.1025 


2 . .. . 


1. 1028 


I-I255 


I.I475 


1. 1530 


1. 1692 


I.2155 


3 •..• 


1.1596 


1. 1940 


1 .2292 


1.2387 


1.2646 


1.3400 


4 .... 


1. 2184 


1.2667 


1.3168 


1.3308 


1.3678 


1.4773 


5 •••• 


1.2800 


1-3439 


1. 4105 


1.4298 


1.4794 


1.6287 


6 .... 


$1.3448 


$1.4257 


$1.5110 


$1.5360 


$1.6002 


$1-7957 


7 .... 


I.4129 


1.5125 


1.6186 


1.6502 


1.7307 


1.9747 


8 .... 


1.4845 


1.6047 


1.7339 


1.7729 


1.8720 


2.1827 


9 .... 


1.5596 


1.7024 


1-8574 


1.9047 


2.0247 


2.4064 


10 


1.6385 


1. 8061 


1.9897 


2.0462 


2.1899 


2.6530 


II . .. . 


$1.7234 


$1.9161 


$2.1315 


$2.1982 


$2.3687 


$2.9250 


12 . . . . 


1.8086 


2.0326 


2.2833 


2.3617 


2.5619 


3.2248 


13 .... 


1. 9001 


2.1564 


2.4459 


2.5372 


2.7710 


3-5553 


14 . . . . 


1.9963 


2.2878 


2.6201 


2.7258 


2.9971 


3.9198 


15 .... 


2.0933 


2.4271 


2.8068 


2.9284 


3-2417 


4-3216 


i6 .... 


$2.2027 


$2.5749 


$3.0067 


$3.1461 


$3.5062 


$4-7645 


17 .... 


2.3142 


2-7317 


3.2208 


3.3800 


3-7923 


5-2529 


i8 .... 


2.4313 


2.8981 


3-4502 


3.6312 


4.IO18 


5-7883 


19 .... 


2.5544 


3.0746 


3.6960 


3.901 1 


4-4365 


6.3816 


20 


2.6837 


3.2618 


3-9592 


4.I9II 


4-7985 


7.0362 


21 


$2.8196 


$3.4605 


$4.2412 


$4.5026 


$5.1900 


$7-7574 


22 


2.9624 


3.6712 


4-5433 


4-8373 


5-6136 


8-5525 


2Z .... 


3.1123 


38948 


4.8669 


5.1969 


6.0716 


9.4292 


24 . . . . 


3.2699 


4.1320 


5-2136 


5-5832 


6.5670 


10.3957 


25 .... 


3-4354 


4-3836 


5.5849 


5.9982 


7.1030 


1 1. 4612 


26 . . . . 


$3.6094 


$4.6506 


$5.9827 


$6.4441 


$7.6826 


$12.6359 


27 . . . . 


3.7921 


4-9338 


6.4088 


6.9231 


8.3094 


13-9311 


28 . . . . 


3.9841 


5-2343 


6.8653 


7-4377 


8.9875 


15-3591 


29 . . . . 


4-1858 


5-5531 


7-3543 


7.9906 


9.7208 


16.9334 


30 . . . . 


4-3977 


5-8913 


7.8781 


8.5846 


10.5143 


18.6691 


31 ..•• 


$4.6203 


$6.2500 


$8.4391 


$9.2227 


$11.3742 


$20.5827 


32 .... 


4-8542 


6.6307 


9.0402 


9.9087 


12.3024 


22.6924 


33 ..•• 


5.0999 


7-0345 


9.6841 


10.6453 


13.3062 


25.0184 


34 . . . . 


5-3581 


7-4629 


10.3738 


11.4366 


14.3920 


27.5828 


35 ••.. 


5.6294 


7-9174 


11.1126 


12.2867 


15.5664 


30.4081 


36 ... . 


$5.9144 


$8.3996 


$11.9041 


$13.2000 


$16.8367 


$33.5249 


37 '•■■ 


6.2138 


8.91 1 1 


12.7620 


14.1811 


18.2105 


36.9612 


38 ... . 


6.5284 


9-4538 


13.6709 


15-2353 


19.6965 


40.7497 


39 •••■ 


6.8589 


10.0295 


14.6446 


16.3677 


21.3038 


44.9266 


40 ... . 


7.2061 


10.6403 


15.6877 


17.5844 


23.0422 


49.5316 


41 . . . . 


$7.5709 


$11.2883 


$16.8050 


$18.8915 


$24.9224 


$54.6086 


42 .... 


7-9542 


11.9758 


18.0020 


20.2956 


26.9561 


60.2059 


43 • • • • 


8.3569 


12.7051 


19.2842 ' 


21.8043 


29.1857 


66.3771 


44 .... 


8.7800 


13-8832 


20.6577 


23.4250 


31-5348 


73-1807 


45 •••• 


9.2245 


14.7287 


22.1290 


25.1663 


34.1080 


80.6817 


46 ... . 


$9.6915 


$15-6257 


$23.7052 


$27.0369 


$36.8813 


$88.9516 


47 ... 


10.1822 


i6.57'73 


25-393^ 


29.0466 


39.8908 


98.0692 


48 .... 


10.6967 


17.5868 


27.2022 


31.2057 


43.1459 


107.1213 


49 . . . . 


11.2383 


18.6597 


29.1397 


33-5253 


46.6666 


118.1012 


50 ... 


II. 80^72 


19.7941 


31.2141 


36.0154 


50.4746 


130.2066 



SMITH'S FINANCIAL DICTIONARY. 133 

Compound interest note. A legal tender note issued by the 
government in the War of the Rebellion. It was payable in 
three years with interest at 6 per cent, compounded semi- 
annually, the interest being payable with the principal at 
maturity. The ten-dollar note, which was the smallest issued, 
was worth $11.94 at maturity. 

Compound option. London Stock Exchange name for the 
call of more, the put of more or the put and call when com- 
bined. Another name is double option. In New York a put 
and call combined are called a spread if two prices are named 
in it (a put price and a call price) or a straddle if only one price 
is named in it (at which price the stock may be either put or 
called). 

Comprador. Native commission merchant and intermedi- 
ary for a foreign business house in China or Japan. 

Comptroller of the Currency. The government official who 
has control of the national banks. National bank examiners 
are his representatives in the various districts to which they 
are assigned. 

For details of the authority and duties of the Comptroller of 
the Currency see National bank act. 

Computing. Ascertaining by mathematical calculation. 

Computing a bill (bill of exchange or draft or a promissory 
note) consists in calculating the day on which it will become 
due. 

Concession. A term applied to a grant of land or privi- 
leges by a government to an individual or to a private con- 
cern which is to build a railroad, prosecute mining operations, 
develop an industry or carry out some undertaking for the 
public as well as for private benefit. 

Concessionaire. An individual or a concern who or which 
obtains a concession ; see Concession. 

Condition. State, as good condition (state) or bad condi- 
tion (state) ; also terms, as the conditions (terms) of a con- 
tract. 

For the meaning of the term condition as applied to the 
crops see Government crop report. 

Conditional indorsement. A conditional indorsement con- 
tains some condition to the indorser's liability. 



134 SMITH'S FINANCIAL DICTIONARY. 

Condition of sale. Terms of sale; terms upon which the 
vendor of property proposes to sell it. 

Conducting transportation. Under this head in the report 
of a railroad company is included all expenses in the trans- 
portation of freight and passengers. 

Confession of judgment. Said when the debtor admits the 
debt and concurs in the obtaining of a judgment against him. 

Confidence game. A term applied to a swindling operation. 

Confirmation. An instrument supplying some defect or 
omission in a contract thereby making it good. 

Confirmatory meeting. English term for a meeting of the 
shareholders (stockholders) of a company to confirm resolu- 
tions passed at a previous meeting. 

Confirmed. Corroborated. An order given verbally or by 
telephone to a stock broker, for instance, is confirmed by re- 
peating the order in writing. Or, an order sent from a stock 
broker's office to the broker on the floor of the exchange 
through a telephone operator at the exchange is confirmed 
when the broker puts himself in direct communication with 
the office and receives a repetition of the order. 

Consideration. Money, property or services given by one 
party to a contract in return for the promise of some specific 
future performance or fulfilment by the other party. 

It is a common habit to designate the money paid for a 
thing as the consideration for it. 

Consideration is a legal term used in England to designate 
the sum mentioned in a transfer deed as paid for the stock or 
shares transferred. 

Consignee. The party to whom goods are sent (con- 
signed). Also see Consignment. 

Consignment. The designation for goods forwarded which 
are to be sold by the receiver of them (who is the consignee) 
for the benefit of the owner (who is the consignor). 

Merchants or manufacturers who wish to introduce goods 
in a market often send a consignment and the goods are sold 
at the best price they will command in order to bring them to 
the attention of buyers. 

The term also is commonly applied to any shipment of 
goods. 



SMITH'S FINANCIAL DICTIONARY. 135 

Consignor. The party who forwards goods — the sender. 
Also see Consignment. 

Consol. An abbreviation or contraction for consolidated 
stock or bond. 

The stock representing the consolidation of the funded debt 
of Great Britain is called consols. A large part of the public 
debt of Great Britain, nine separate loans, being in the form 
of annuities, was consolidated in a 3 per cent stock (or bond) 
in 1751. In 1888 the 3 per cents were converted into 2 3-4 per 
cents with the provision that in 1903 the rate should be re- 
duced to 2 1-2 per cent. The price of consols is regarded as 
the gage of the national credit of Great Britain. The official 
name of consols is consolidated annuities. 

Consolidated annuity. See Consol. 

Consolidated bond. A bond in an issue created to refund 
(take up and replace) two or more previous issues ; some- 
times called unified bond. 

Consolidated mortgage. A mortgage taking the place of 
two or more mortgages previously existing ; sometimes called 
unified mortgage. 

Consolidated Stock and Petroleum Exchange of New York. 
This exchange was created in 1885 by an amalgamation of the 
New York Petroleum Exchange and Stock Board and New 
York Mining Stock and National Petroleum Exchange. On 
this exchange dealings are conducted in the leading stocks 
dealt in on the New York Stock Exchange. 

Constant. In a financial calculation constant means a fixed 
value, as the gold constant. 

Constitution. The organic or fundamental law of any or- 
ganized body, as, for instance, the constitution of the New 
York Stock Exchange. 

Construction account. This account in the case of a rail- 
road represents the capital invested in the road and equip- 
ment. 

Contango. London Stock Exchange term, meaning the 
charge paid by the buyer for the privilege of continuing his 
bargain (contract) to the next fortnightly settlement. 

Examples: 1-8 to 1-4 contango means that the bull (who 
is long) pays to the jobber 1-4 per cent for the accommodation 
and the bear (Avho is short) receives from the jobber 1-8 per 



136 SMITH'S FINANCIAL DICTIONARY. 

cent. 1-8 contango to i-8 back (abbreviation for backwarda- 
tion) means that the bull pays i-8 per cent and the bear pays 
1-8 per cent. i-i6 contango to even means that the bull pays 
i-i6 per cent and the bear carries over at even, or in other 
words, pays nothing. For additional information see Settle- 
ment, The. 

Contango day. Same as continuation day or making-up 
day ; the first day of the settlement on the London Stock Ex- 
change when arrangements are made to continue bargains 
(contracts). For additional information see Settlement, The. 

Continental bill. A bill of exchange payable on the Conti- 
nent of Europe. Dealers in quoting exchange name prices 
for sterling bills (which usually are payable in London) and 
Continental bills (which may be payable in either Paris, Ber- 
lin, Vienna or Amsterdam or at some other place on the Con- 
tinent) . 

Continental markets. Paris, Berlin and Antwerp are gen- 
erally understood to be meant when the Continental markets 
are spoken of. 

Contingent damages. Damages that may be sustained the 
extent of which cannot at the time be determined. 

Contingent interest. An interest that is dependent on the 
outcome of a speculation or venture or undertaking. 

Contingent liabilities. Liabilities that may be entailed the 
extent of which cannot at the time be determined. 

Continuation day. Same as contango day or making-up 
day; the first day of the settlement on the London Stock Ex- 
change when arrangements are made to continue bargains 
(contracts). For additional information see Settlement, The. 

Continued bond. A bond which is not required to be pre- 
sented for redemption at maturity but which may be held for 
a .further indefinite period at the same rate of interest or 
perhaps at a different rate. 

Continuing account. Same as current or open or running 
account ; an account that continues and in which a settlement 
is made at intervals, as every 30 days, 60 days or twelve 
months. 

Continuing agreement. An agreement entered into by a 
borrower with the bank or other lender from which or whom 
he regularly borrows money on call. It obviates the making 



SMITH'S FINANCIAL DICTIONARY. 137 

of a special or separate note each time a loan is effected. It 
contains all the usual provisions safeguarding the lender. 

The form of continuing agreement in use in New York fol- 
lows: 

Knozv all Men by these Presents, That the undersigned, in considera- 
tion of financial accommodations given, or to be given, or continued to 
the undersigned by THE TWENTY-NINTH NATIONAL BANK OF 
THE CITY OF NEW YORK, hereby agree with the said Bank that 
whenever the undersigned shall become or remain, directly or contingently, 
indebted to the said Bank for money lent, or for money paid for the use or 
account of the undersigned, or for any OA^erdraft or upon any mdorse- 
ment, draft, guarantee or in any other manner whatsoever, or upon any 
other claim, the said Bank shall then and thereafter have the following 
rights, in addition to those created by the circumstances from which such 
indebtedness ma}'' arise against the undersigned, or his, or their executors, 
administrators or assigns, namely: 

1. All securities deposited by the undersigned with said Bank, as col- 
lateral to any such loan or indebtedness of the undersigned to said Bank, 
shall also be held b}'" said Bank as security for any other liability of the 
undersigTied to said Bank, whether then existing or thereafter contracted; 
and said Bank shall also have a lien upon any balance of the deposit account 
of the undersigned with said Bank existing from time to time, and upon 
all property of the undersigned of every description left with said Bank for 
safe keeping or otherwise, or coming to the hands of said Bank in any way, 
as security for any liability of the undersigned to said Bank now existing 
or hereafter contracted. 

2. Said Bank shall at all times have the right to require from the 
undersigned that there shall be lodged with said Bank as security for all 
existing liabilities of the undersigned to said Bank, approved collateral 
securities to an amount satisfactory to said Bank; and upon the failure of 
the undersigned at all times to keep a margin of securities with said Bank 
for such liabilities of the undersigned, satisfactory to said Bank, or upon 
any failure in business or making of an insolvent assignment by the under- 
signed, then and in either event all liabilities of the undersigned to said 
Bank shall at the option of said Bank become immediately due and payable, 
notwithstanding any credit or time allowed to the undersigned by any in- 
strument evidencing any of the said liabilities. 

3. Upon the failure of the undersigned either to pay any indebtedness 
to said Bank when becoming or made due, or to keep up the margin of 
collateral securities above provided for, then and in either event said Bank 
may imm.ediately without advertisement, and without notice to the under- 
signed, sell any of the securities held by it as against any or all of the lia- 
bilities of the undersigned, at private sale or Broker's Board or otherwise 
and apply the proceeds of such sale as far as needed toward the payment of 
any or all of such liabilities together with interest and expenses of sale, 
holding the undersigned responsible for any deficiency remaining unpaid 



138 SMITH'S FINANCIAL DICTIONARY. 

after such application. If any such sale be at Broker's Board or at public 
auction, said Bank may itself be a purchaser at such sale free from any 
right or equity of. redemption of the undersigned, such right and equity" 
being hereby expressly waived and released. Upon default as afore- 
said, said Bank may also apply toward the payment of the said liabili- 
ties all balances of any deposit account of the undersigned with said 
Bank then existing. 

It is further agreed that these presents constitute a continuing agree- 
ment, applying to any and all future as well as to existing transactions- 
between the undersigned and said Bank. 



Dated, New York, the day of 19. . 

Also see Collateral note. 

Contract. A formal agreement between two or more par- 
ties ; also the writing setting forth and evidencing an agree- 
micnt and signed by the parties to it is a contract. 

It is an accepted rule of law that a contract should be inter- 
preted in accordance with the intention of the parties thereto ; 
and the usage or custom of any particular trade, occupation, 
business or place when it is reasonable, uniform, well settled 
and not in opposition to fixed rules of law or in contraven- 
tion of the express terms of a contract is deemed to form a 
part of the contract and to enter into the intention of the 
parties. 

Following are the contracts which will not be enforced by 
the courts unless there is written evidence of them : Con- 
tracts for the sale of lands or of any interest in lands : leases 
for a longer period than one year; every contract that is not 
to be performed within one year from the making thereof; 
every special promise to pay the debt of another person ; every 
agreement made upon consideration of marriage except mu- 
tual promises to marry ; every contract for the sale of personal 
property for the price of $50 or more. Other contracts than 
these are valid though not in writing. 

It is the general rule of law that a written contract cannot 
be orally varied or contradicted by oral evidence. 

Contracts falling due on a holiday are settled on the pre- 
ceding day. When, however, two holidays occur on consecu- 
tive days contracts falling due on the first of those days are 
settled on the preceding day, while contracts falling due on 
the second of the holidays are settled on the succeeding day. 



SMITH'S FINANCIAL DICTIONARY. 139 

Contract grade. The grade of grain, wheat or coffee or 
anything else that is required to be delivered in fulfilment of 
a contract. 

Contract note. In merchandising a contract note is issued 
when one party has bought goods of or sold goods to another 
and it contains a description of the goods, the price, time of 
delivery, time of payment, etc. 

On the London Stock Exchange after a broker has bought 
or sold a stock he sends to his client (customer) a contract 
note, so-called, showing the amount (or number of shares) and 
the price, together with all charges. 

Contribution. When two or more parties jointly owe a 
debt and one is compelled to pay the whole of it the others 
are bound to indemnify him for the payment of their shares ; 
an indemnifying payment is called a contribution. 

Contributory. A legal term used in Great Britain to desig- 
nate the holder of stock or of shares not fully paid up, so that 
the holder is liable to contribute further calls. The term is 
generally used in winding up (liquidation) proceedings. 

Controlling company. One Avhich controls other compa- 
nies by ownership of a majority of their stocks. 

Convertible bond. A bond that is convertible into or ex- 
changeable for stock. 

Cooked account or report. An account or a report that has 
been garbled or manipulated for the purpose of deceiving. 
For instance, the financial report of a corporation, as a rail- 
road, that has been made up so as to show a better condition 
than really exists is said to have been cooked. 

Copper. A general designation for the stock of a copper 
mining company. 

Copper is also a slang expression for a reversed proceeding; 
for instance, if a speculator receives advice to buy a stock and 
instead sells it short, he is said to have coppered the advice. 

The large i-cent United States coin formerly issued was 
called a copper. 

Corn. In the United States corn means Indian corn or 
maize ; in England it means wheat specifically or wheat, bar- 
ley, rye and oats collectively. 

Corn belt. The states, forming a belt, which are the largest 



140 SMITH'S FINANCIAL DICTIONARY. 

producers of corn, viz : Illinois, Indiana, Iowa, Kansas, Mis- 
souri, Nebraska, Ohio. 

Corner. A corner in a stock is created by the purchase of 
all the floating or purchasable stock of a company, after which 
the price of it can be advanced at will. Speculators who are 
short of the stock and are unable to buy or borrow to make 
delivery to buyers or to return stock which they have bor- 
rowed are in speculative parlance squeezed. They must 
settle with buyers as best they can. 

Similar operations are conducted in grain, cotton, cofifee and 
other speculative commodities. 

Corporation. A business corporation is an artificial body, 
created by law, composed of individuals united under a com- 
mon name, with power of succession, so that changes in the 
individuals composing it do not affect the body itself; in law 
it is treated as a person. 

The common name for corporation is company. For addi- 
tional information see Company. 

Corporation seal. The common seal of a corporation (joint- 
stock company). 

Formerly a corporation could execute contracts only by its 
common seal, but now the use of the seal is not necessary in 
ordinary business, although it is required in extraordinary 
matters. 

Corporation stock. In Great Britain the term corporation 
stock means a security issued by an incorporated city, town 
or borough. 

Cost and freight. When goods are sold "cost and freight" 
the price includes the cost of the goods and the freight charges 
on them, but does not include insurance. 

Cost, insurance and freight. The letters *'c. i. f." in a con- 
tract of sale of merchandise stand for the words "cost, insur- 
ance, freight" and they mean that the price agreed upon is all 
that the buyer is to be required to pay for the goods them-, 
selves, for their transportation to destination and for their 
insurance while in transit. 

The seller furnishes the goods, pays the insurance on them, 
pays the freight on them, delivers the merchandise to the car- 
rier and forwards the bill of lading to the buyer. His diity is 
then discharged. 



SMITH'S FINANCIAL DICTIONARY. 141 

The carrier is an agent of the buyer and delivery to the 
carrier is equivalent to delivery to the buyer. The seller is 
entitled to the amount named in his contract whether the 
goods reach the buyer or not. For loss or damage while in 
transit the buyer must look exclusively to the carrier or the 
insurer. 

Cotton belt. The states, forming a belt, which are pro- 
ducers of cotton, viz : Alabama, Arkansas, Florida, Georgia, 
Indian Territory, Kansas, Kentucky, Louisiana, Mississippi, 
Missouri, North Carolina, Oklahoma, South Carolina, Ten- 
nessee, Texas, Virginia. 

Cotton bill. A draft (bill of exchange) drawn against the 
consignee of a shipment of cotton. The bill of lading is at- 
tached to (accompanies) the draft and is surrendered on pay- 
ment of the draft or on the acceptance of the draft. 

Cotton contract. The contract recognized by the New 
York Cotton Exchange is for 50,000 pounds of cotton, in about 
100 bales, growth of the United States, to be delivered from a 
licensed warehouse at the port of New York in the month 
agreed. The delivery is at seller's option upon 3 days' notice 
to the buyer a.nd from one warehouse. 

Cotton crop year. Begins September i, when the new crop 
is ready to be picked. 

Coulisse. The outside ("curb") market for securities in 
Paris, which is conducted under the portico or peristyle of the 
bourse. 

In the coulisse dealings are conducted in securities not dealt 
in on the bourse, except that there are dealings in rentes in 
the coulisse as well as on the bourse. A trader or a broker in 
the coulisse is called a coulissier. There is no fixed commission 
in the coulisse, but the usual commission is about 1-16 per 
cent. 

Coulissier. A trader or a broker in the coulisse or outside 
(''curb") market for securities in Paris. 

Counterfeit. Counterfeit money is bogus money ; that is, 
money manufactured without authority of law in imitation of 
genuine money and issued with intent to deceive and defraud. 

Counterfoil or stub. A portion of a document permanently 
retained in a book as a memorandum after the other portion 



142 SMITH'S FINANCIAL DICTIONARY. 

has been detached by means of a line of perforations or other- 
wise, as the counterfoil or stub of a check or receipt. 

Counter rate. In a transaction in (foreign) exchange the 
counter or over-the-counter rate is the rate which the dealer 
in exchange pays for a bill. 

Countersigned. Authenticated by an additional signature. 

Country bank. In classifying the national banks the Comp- 
troller of the Currency designates as a country bank one which 
is not situated in a reserve city or a central reserve city. 

Country check. Designation for a check on a bank remote 
from a clearing house. 

Country note. In Great Britain this term means a circula- 
ting note issued by a bank other than the Bank of England. 
The Bank of England has the sole right to issue notes in a 
certain radius of which London is the centre. A note issued 
by it is designated simply as a bank note. 

Coupon. The obligation for interest on a bond that is 
called a coupon is a printed part of the bond attached in ticket 
form so that it may be cut off when it becomes due. A coupon 
may be sold or may be deposited in a bank the same as a check. 

Coupon bond. A bond payable to bearer without registra- 
tion of the owner's name. The holder may clip the coupons 
and collect the interest called for. 

Coupon bonds are preferred for speculative dealings and 
for temporary investment. They generally sell fractionally 
higher than registered bonds for the reason that they are more 
marketable and because a change in ownership requires no 
formal transfer but merely the delivery and receipt of the 
certificate. 

Sometimes registered coupon bonds are issued. These 
are bonds the principal of which is payable only to those 
whose names are inscribed on them as owners and whose 
names also are registered (entered on the books of the com- 
pany issuing them), but the coupons calling for the payment 
of the interest as it becomes due are payable to bearer. 

Sometimes, also, coupon bonds are issued which are con- 
vertible into (exchangeable for) registered bonds both prin- 
cipal and interest on which are payable to the registered 
owner. Payment of interest on registered bonds (not regis- 



SMITH'S FINANCIAL DICTIONARY. 143 

tered coupon bonds) is by check sent to the addresses of the 
registered owners. 

Coupon bonds issued by the United States government are 
convertible into registered bonds, but there is no provision of 
law for the conversion of registered bonds into coupon bonds. 

When a coupon has been detached from a bond before pay- 
ment of it is due the tendering of the amount of the coupon in 
cash supplies the deficiency and makes the bond a delivery. 

The English name for a coupon bond is bond to bearer. 

Coupon currency. A plan was presented to the Fifty-sev- 
enth Congress (1901-2) for paper currency of the denomina- 
tions of 5 and 10 cents. The name coupon currency was de- 
rived from the proposition to print the currency of either de- 
nomination in blocks or sheets of five pieces or coupons which 
could be detached as needed. The coupon currency was to be 
purchasable in any lawful money of the United States. 

The idea was to enable small sums to be sent by mail, al- 
though the coupon currency was to be legal tender for amounts 
not exceeding $10. The plan did not commend itself for the 
reason that it involved a return to the use of "shinplasters." 

Coupon off. When a bond is sold coupon off the coupon 
for the current interest payment has been detached from the 
bond. 

Coupon on. When a bond is sold coupon on the coupon for 
the current interest payment remains attached to the bond. 

Also see Coupons attached. 

Coupons attached, A bond to which remain attached suc- 
cessive coupons past due. In such a case the value of the 
-coupons depends on the prospect for their payment. 

Course of exchange. This is the English name for a report 
or record of rates of foreign exchange. 

In London there is a market for (there are dealings in) bills 
of foreign exchange (commonly called foreign bills) on Tues- 
day and again on Thursday in each week at the Royal Ex- 
change. The market begins about 2 p. m. and continues until 
about 3 p. m. At the conclusion of the market each foreign 
l)anker (dealer in foreign exchange) prepares and issues a list 
of prices, designated as the course of exchange, which gives 
the prices at which transactions were negotiated. 



144 SMITH'S FINANCIAL DICTIONARY. 

Course of trade. Trade as it is expanding or contracting 
in volume. 

Court of directors. The assembled board of directors of the 
Bank of England is called the court of directors. 

Court of exchequer. An English court for the trial of mat- 
ters relating to the crown revenues. 

Cover. A term used on the London Stock Exchange, which 
means the security deposited by a borrower with the lender 
or by a speculator with a broker to protect the lender or 
broker against loss. Besides the cover speculators often have 
to deposit money to protect the lender or broker in case the 
value of the security deposited as cover falls rapidly. This 
money is called margin. 

Margin is not required to any great extent in London, where 
credit enters more largely into business in stocks, and in fact 
in other things, than in New York. When the credit of the 
client (customer) in London is established his broker does 
not ordinarily call on him for any cash until the next settle- 
ment (see Settlement, The). 

Covering. In foreign exchange dealings covering ordi- 
narily consists in paying one bill of exchange (draft) with 
another. For example, a foreign exchange dealer in New 
York draws and sells a bill on London due in 60 days. When 
the bill matures (falls due) he takes it up (pays it) with a de- 
mand bill (bill payable immediately) which he has purchased. 
Again : A dealer in New York draws and sells a bill on Lon- 
don and buys a bill on Paris for an equivalent amount which 
he forwards to London in cover or discharge (in payment) of 
the bill which he sold on London. 

Covering also is a speculative term, meaning the act of buy- 
ing stocks or commodities for the purpose of closing short 
contracts — in other words, buying back stocks or commodities 
previously sold, but which were not possessed when sold. 

On the London Stock Exchange the expression is also used 
in this sense sometimes ; but more frequently it describes the 
operation by which a jobber, having bought from or sold to a 
broker, "undoes" the bargain by a fresh purchase or sale with 
another jobber or broker. 

Cowry money or cowry-shell money. The money-cowry 
or the cowry-shell that is used as money is a beautiful hemi- 



SMITH'S FINANCIAL DICTIONARY. 145 

Spherical shell scarcely an inch long, light* straw color and 
white. Cowry shells abound on the Malabar coast and near 
the Maldive Islands. They are shipped to England for trade 
with Africa where they are put up in strings of 100 shells and 
50 strings pass for the equivalent of $1. These shells are also 
used as currency in Siam where no of them are equivalent to 
I cent. 

Craze. The term as applied to stocks means an extrava- 
gant desire to buy. 

Credit. Confidence established by an individual, firm, corpo- 
ration or government in his or its ability and disposition to 
fulfil financial obligations. Opposing terms are "in good 
credit" and "in bad credit." 

Property obtained on credit is property received and to be 
paid for at a future time. 

A credit entry in an account is a favorable entry; it is the 
reverse of a debit entry. 

Credit bill. A bill of exchange (or draft) drawn against 
credit granted by the drawee (the one who is to pay the bill) 
to the drawer. 

Credit currency. Currency issued by a bank for use in 
transactions where ordinary bank credit available through the 
medium of checks is not practicable. 

For example, a merchant or a manufacturer in New York 
needing extra funds borrows from his bank, but he does not 
borrow actual money ; he in reality borrows credit against 
which he draws his checks. 

When a farmer needs extra money to harvest his crops or 
move them to market it is not practicable for him, as a rule, 
to borrow credit and draw checks against it. He must have 
the actual money. Advocates of credit currency hold that 
the banks should be authorized to issue currency for such pur- 
poses secured by their general assets in the same manner that 
the credits which they loan to be checked against are secured. 
Such a currency, they urge, would be perfectly safe and would 
be elastic, supplying temporary and local needs and obviating 
the danger of currency famines. 

For additional information see Asset currency ; also see 
Emergency currency. 



146 SMITH'S FINANCIAL DICTIONARY. 

Credit Foncier. An institution in France which makes loans 
on real estate ; it is an agricultural banking institution. 

Credit Mobilier. An institution incorporated in France in 
1852 for general financial operations. The same name was 
borne by a concern chartered in Pennsylvania which in 1863 
undertook the construction of the Union Pacific Railroad and 
collapsed amid scandal. 

Credit note. A commercial term ; a memorandum or ac- 
count of goods- sent back to the consignor by the consignee 
to be credited to the consignee.- The term also applies to 
a memorandum transmitted by the consignee to the consignor 
in which the consignor claims an allowance, as for a shortage 
in the consignment or for a deficiency in quality, etc. 

Creditor. One to whom another is indebted. 

Credit slip. Same as paying-in slip ; English name for the 
printed form upon which a depositor in a bank enters the 
amounts of checks, money, etc., to be placed to his credit in 
the bank. 

Cremation certificate. A certificate that securities have 
been cremated — destroyed by burning. Such a certificate is 
furnished to the New York Stock Exchange when former secu- 
rities have been supplanted by new ones. 

Crime of 1873,. A phrase applied to the coinage act of Feb- 
ruary 12, 1873, which discontinued the coinage of the silver 
dollar by omitting it from the list of coins authorized to be 
minted (manufactured) by the government. 

Advocates of the free coinage of silver later declared that 
the act was passed surreptitiously. The bill was before Con- 
gress two years and ten months before it was adopted. It 
was printed thirteen times by order of Congress. The de- 
bates on it occupied sixty-six columns in the Senate proceed- 
ings and seventy-eight columns in the House proceedings. 
The reason the discontinuance of the silver dollar attracted so 
little public notice at the time was that the metal in it was 
then worth two cents more than the metal in a gold dollar ; in 
other Avords, a silver dollar was worth $1.02 in gold money. 
Consequently the silver dollar did not circulate and was prac- 
tically unknown. 

Coinage of the silver dollar was resumed under the Bland- 
Allison act of February 28, 1878. 




SMITH'S FINANCIAL DICTIONARY. 147 

Crop report. See Government crop report; also see 
Weather-crop report. 

Cross. When a cross is used as a signature by a person 
who cannot write the operation is generally described as sign- 
ing by mark. For additional information see Signing by 

ark. 

Crossed check. The crossed check is not in use in the Uni- 
ted States, but it is in general use in Great Britain, where it is 
recognized and in fact authorized by law. 

When a check bears across its face an addition of the words 
"and company" or any abbreviation thereof between two 
parallel lines (two lines up and down) or of two parallel 
transverse lines simply, either with or without the words ''not 
negotiable," that addition constitutes a crossing and the check 
is crossed generally as distinguished from crossed specially. 

When a check bears across its face an addition of the name 
of a banker, either with or without the words "not negotiable," 
that addition constitutes a crossing and the check is crossed 
specially and is crossed to that banker. 

When a check is uncrossed a lawful holder may cross it 
generally or specially. When a check is crossed generally 
the banker on whom it is drawn must not pay it otherwise than 
to a banker; when a check is crossed specially the banker on 
whom it is drawn must not pay it otherwise than to the banker 
to whom it is crossed. 

A banker who pays a check crossed generally otherwise 
than to a banker or a check crossed specially otherwise than 
to the banker to whom it is crossed is liable to the true owner. 

Crossed checks are generally used in London Stock Ex- 
change transactions. The object in crossing checks, of course, 
is to prevent their payment to wrongful holders. 
. Cross exchange. An operation in exchange in which three 
or more places are involved. For example, a person in New 
York who has an obligation to meet in London may find 
it more advantageous to forward to London in payment of it 
a draft (bill of exchange) on Paris than to forward a draft on 
London. In such a case exchange on Paris in New York 
would be cheaper than exchange on London in New York. 

Also see Arbitration of exchange. 

Cross order. Same as matched order ; a stock market term, 



148 SMITH'S FINANCIAL DICTIONARY. 

meaning an order to buy and sell the same stock, usually for 
the purpose of making a quotation. 

Sometimes a broker receives an order from one customer to 
buy and from another an order to sell the same stock ; then he 
has a cross order which is not fictitious. On the New York 
Stock Exchange a broker who has an order to buy and another 
order to sell the same stock is not allowed to fulfil the orders 
by entering one against the other. He must make an actual 
purchase of another broker and an actual sale to another 
broker. 

Cross trade. A stock market designation for a simultaneous 
purchase and sale of the same stock. 

The term cross trade also is a synonym for a wash trade or 
transaction when a stock is simultaneously bought and sold 
in order to make a quotation. Cross trading or washing 
when extensive in a stock is generally for the purpose of in- 
ducing speculation in the stock by imparting apparent activity 
to it. The dealings are fictitious and so are the prices. 

Bucketing operations may be carried on by means of cross 
trades; see Bucketing. 

CT. As printed on the tape by the stock ticker these letters 
mean certificates. 

Cum call. With call ; on the London Stock Exchange when 
a stock or share is sold cum call it means that a call has been 
made and that the buyer will have to pay it; see Call. 

Cum dividend. With dividend; on the London Stock Ex- 
change when a stock is sold cum dividend it means that a divi- 
dend has been declared or is due on the stock and that the 
dividend goes to the buyer of the stock. On the New York 
Stock Exchange the corresponding term is dividend on. 

Cum drawing. English term ; a bond sold cum drawing in- 
cludes any advantage to the buyer if the bond is drawn for re- 
demption. 

Cumulative consols. On receiving instructions the Bank of 
England will invest the interest on consols every quarter, add- 
ing it to the capital sum. The system is also applied to other 
British government issues and to some corporation stocks. 

Cumulative dividend. A dividend which if not paid regu- 
larly or in full accumulates and must be paid in the future. 

Cumulative stock. Usually preferred stock the dividend on 



SMITH'S FINANCIAL DICTIONARY. 149 

which if not paid regularly or in full accumulates and must 
be paid in the future before a dividend can be paid on the 
common stock. 

Curb market. See Outside market. 

Curbstone or curb broker. A name formerly applied to a 
broker who bought and sold puts, calls and other privileges. 
Now it means a broker who deals in the outside or curb 
market. 

Currency. That which is in general use and circulation as 
money; see Money. 

Currency, however, is commonly construed as paper money, 
whether United States notes (greenbacks), gold certificates, 
silver certificates, Treasury notes (silver-purchase notes) or 
bank notes. 

Coins of a denomination less than $1 are designated as frac- 
tional currency. 

Currency act, approved March 14, 1900. Official title of the 
gold standard act; see Gold standard act. 

Currency bond. A bond the principal and interest on which 
may be paid in any kind of lawful money. 

Currency certificate. Sometimes called legal tender certifi- 
cate ; a certificate (or receipt) for United States notes (green- 
backs) deposited in the Treasur}/ or in any Sub-Treasury of 
the United States.; of the denomination of $10,000 (at one time 
also $5,000) ; authorized by the act of June 8, 1872; authoriza- 
tion repealed and issuance discontinued by the act of March 
14, 1900. 

The certificate bore no interest and was not a legal tender. 
The notes represented by the certificates were merely a special 
deposit and the certificate, which was transferable, was re- 
deemable at the place where issued. 

Currency certificates were chiefly used in the settlement of 
clearing house balances and for holding in the reserves of 
banks. 

Currency of a bill. The period between the date on which 
a bill of exchange (draft) is drawn (or is accepted) and that 
on which it is due. 

Current account or account current. Same as open or run- 
ning or continuing account ; an account that continues and in 



150 SMITH'S FINANCIAL DICTIONARY. 

which a settlement is made at intervals, as every 30 days, 60 
days or twelve months. 

in Great Britain a current account (also called drawing ac- 
count) in a bank is one which may be added to by deposits and 
drawn against at will- — at any time. On the other hand, a 
deposit account is one in which money deposited remains by 
agreement for a specified time and draws interest at a speci- 
fied rate. 

Current assets. The current assets of a stock company in- 
clude all shifting and changeable assets except material and 
supplies. 

In the case of a railroad current assets include (i) cash on 
hand and deposit ; (2) loans and bills receivable ; (3) accounts 
receivable; (4) due from other companies and individuals; (5) 
due from the company's agents and officers ; (6) advances to 
other companies ; (7) sundry assets. 

Current liabilities^ The current liabilities of a stock com- 
pany include (i) loans and bills payable ; (2) accounts payable; 
(3) pay-rolls and vouchers ; (4) interest and dividends ac- 
crued ; (5) due to other companies (in the case of a railroad, 
traffic balances) ; (6) sundry liabilities. 

Custom. Usage which has acquired the force of law by 
reason of its being continued, peaceable, reasonable and con- 
sistent. 

Customer. In banking a customer is one who has dealings 
with a bank, particularly one who borrows money from it ; in 
stock dealings a customer is a broker's principal^the one who 
employs the broker. The English name for customer is client. 

Custom house. The place established by the government 
where importers of merchandise make entry of it and pay the 
duty charged on it ; also the place where vessels to and from 
foreign ports are entered and cleared. 

Customs or customs duty. The tariff or tax levied or as- 
sessed upon articles imported from another country (in some 
countries it is also levied upon articles exported). 

Cut money. In some countries, owing to the scarcity of 
small coins, large coins formerly were cut into several equal 
parts and circulated as fractional currency which was called 
cut money. 

Cutthroat mortgage. A mortgage intended to cut off the 



SMITH'S FINANCIAL DICTIONARY. 151 

mortgagor's right of summons or notice and recourse ; but this 
is an expedie'nt not sustained in equity proceedings. 

Cutting a melon. When a company makes a large extra 
distribution to its shareholders in money or stock the act is 
colloquially described as cutting a melon. 

CV. As printed on the tape by the stock ticker these letters 
mean convertible, as convertible bonds. 

CY. As printed on the tape by the stock ticker these letters 
mean currency. 

Cypher code. Same as code ; see Code. 



D 



D. As printed on the tape b}^ the stock ticker this letter 
means debenture or division, as debenture or divisional bonds. 

D. A. Abbreviation for documentary bill for acceptance ; 
used in foreign exchange dealings. See Documentary bill for 
acceptance. 

Dabbling. In speculation dabbling is venturing incident- 
ally and lightly. 

Damages. In law money recoverable as amends for a 
wrong or harm inflicted; injury such as can be estimated in 
money. 

Damages on protested bills. The penalty allowed by law 
to the holder of a bill (promissory note or acceptance) which 
has gone to protest. In most states these damages are in 
addition to the protest fee and also in addition to interest after 
maturity. 

Dating. This is a term applied to a method of extending 
credit beyond the period for which it ostensibly is granted. 

For example, if a buyer of goods is to receive credit for 30 
days and is allowed a 30-day dating the period of credit (30 
days) does not begin and the bill for the goods is not dated 
until 30 days after the purchase (or after the shipment of the 
goods if shipment is not made at the time of the purchase). 
Thus, a credit of 60 days is actual!}^ granted. 



152 SMITH'S FINANCIAL DICTIONARY. 

Days of grace. The days, usually three, allowed in some 
states for payment of a note or bill of exchange after it be- 
comes due as expressed in the obligation itself. For addi- 
tional information see Grace. 

Day-to-day accommodation. English term for a loan re- 
newable from day to day. 

Day-tOi-day loan. English term for a loan renewable from 
day to day. 

Day-to-day money. English term for a loan of money re- 
newable from day to day. Known as call money in the United 
States, that is, money returnable on the demand or call of the 
lender. 

Day-to-day option. London Stock Exchange name for an 
option which continues for only one day. The corresponding 
term on the New York Stock Exchange is over-night. 

DE. As printed on the tape by the stock ticker these letters 
mean deferred. 

Dead assets. Assets that are unproductive and perhaps of 
little or no value. 

Dead beat. A colloquial name for a person who is notorious 
for not paying his debts. 

Dead duck. New York Stock Exchange term for a specu- 
lator who is hopelessly insolvent. 

Dead freight. A sum paid by a shipper for freight room 
engaged and paid for, but not occupied. 

Deadhead. Name applied to a person who is accorded a 
free privilege, as a pass for riding free on a railroad or a frank 
for sending telegraph despatches free ; or who, in fact, obtains 
any privilege for nothing. 

Dead weight. The name given to that portion of the British 
national debt which is not represented by investments or re- 
productive expenditure ; it includes the permanent debt of the 
government of Great Britain to the Bank of England, amount- 
ing to £11,015,100, which serves as backing for (as security 
for) a corresponding amount of notes (paper money) issued 
by the bank. This item appears as a credit item in the weekly 
return of the bank under the heading "Issue department." 

Deal. A secret bargain or understanding among persons 
for the benefit of those engaged in it. 



SMITH'^ FINANCIAL DICTIONARY. 153^ 

A deal in stocks is a scheme to advance or depress prices ; it 
is usually conducted with secrecy. 

Dealer. In banking nomenclature a dealer is a depositor in 
a bank who borrows (obtains a loan) from the bank whenever 
his need for money exceeds the amount which he has on de- 
posit in the bank. 

On the London Stock Exchange dealer is another name for 
jobber, but jobber is the name more commonly used; see Job- 
ber. 

Dear money. Money is dear when it cannot be obtained 
except at high rates of interest. At such a time securities are 
likely to be depressed, not because they are worth less, but 
because money is worth more — the purchasing power of money 
having increased. 

Debenture. A certificate of debt issued by a corporation. 

Unless secured by a mortgage it is simply a promise to pay, 
or in other words, a promissory note. It differs from an in- 
come bond only in that it contains a promise to pay a certain 
amount of interest at stated periods. 

In Great Britain a debenture bond or stock is generally 
thought to be secured by mortgage on real property ; but this 
is not necessarily the case. The word merely means a debt 
or promise to pay. By universal custom, however, the deben- 
ture bonds or stocks of British companies rank before the pre- 
ference and ordinary capital ; and as a rule they are secured 
by a charge on the companies' real property. 

In Great Britain the chief difference between a debenture 
bond and a debenture stock is that a bond is for a fixed amount, 
while a stock is divisible and may be transferred in multiples 
of £1 or sometimes even in smaller amounts. Another .im- 
portant difference lies in the fact that a bond is generally a 
negotiable instrument, transferable by delivery, and is the 
property of the bearer, with interest coupons attached, while 
stock is registered in the name of the holder and is transferred 
by deed, the interest being forwarded to holders by the com- 
pany. 

Debit. A debt recorded in an account. A debit entry in 
an account is an unfavorable entry ; it is the reverse of a credit 
entry. 



154 SMITH'S FINANCIAL DICTIONARY. 

Debit note. A commercial term ; a memorandum or account 
of goods sent back to the consignor by the consignee and 
debited by the consignee to the consignor. 

Debt. A pecuniary obligation ; that which one owes to 
another. 

Debt-book. A ledger. 

Debt certificate. The commonest form of debt certificate 
is an interest-bearing bond as issued by a corporation, munici- 
pality or government. 

Debt of honor. A debt that depends for payment solely on 
the honor of the debtor. 

Debt of record. A debt evidenced by a judgment. 

Debtor. One from whom something, as money, is due to 
another. 

Declaration of trust. An acknowledgment that property to 
which one person holds the title belongs to another for whose 
benefit the title is held. 

Deed. A written instrument of conveyance under seal, as a 
deed for land. 

Deed of gift. A conveyance of property in consideration of 
love and affection or good will. 

Deed of trust. A conveyance of property to a party who is 
to hold it in trust for another. 

Deep level. London Stock Exchange name for the stock 
of a South African mining company whose workings or levels 
are deep down in the earth ; an ''outcrop" mine is worked near 
the surface. 

Defaced coin. One stamped with unauthorized words, let- 
ters or marks. 

Defaced securities. See Destroyed or defaced securities. 

Defalcation. Embezzlement or fraudulent appropriation of 
money or property held in trust ; a deficiency caused by a 
breach of trust. 

Default. Failure to perform or fulfil an obligation, as fail- 
ure to make payment on a promissory note or acceptance .at 
maturity (when due). 

Failure to pay interest on bonds when due constitutes a 
default and furnishes ground for application for a receiver- 
ship. 



SMITH'S FINANCIAL DICTIONARY. 155 

Defaulter. One who misappropriates or fails to account for 
money or property with which he is entrusted. 

On the London Stock Exchange one who has failed to meet 
his bargains (contracts) is a defaulter and ceases to be a mem- 
ber. For additional information see Hammered. 

Deferred Dond. In the United States a deferred bond is a 
bond upon which the payment of interest is deferred for a 
certain period. 

In Great Britain a deferred bond is a bond the interest on 
which increases on a scale until it reaches the maximum rate. 

Deferred ordinary stock. English ; also called A stock ; re- 
ceives a varying dividend from the balance remaining after 
payment on the preferred ordinary stock. For additional in- 
formation see Deferred stock. 

Deferred stock. Stock which is to realize no dividend until 
some future contingent event, as when the net earnings shall 
have amounted to more than enough to pay a dividend on the 
common stock. Deferred stock is rarely issued in the United 
States. 

In Great Britain when an ordinary (common) stock has 
been divided into two parts, one part, called deferred, receives 
no dividend until the other part, called preferred, has received 
a dividend at a fixed rate. The deferred stock is called A 
stock and the preferred stock is called B stock . 

This B or preferred stock is not the same as preferred stock 
in the United States. What in the United States is called pre- 
ferred stock is in Great Britain called preference stock and 
preference stock in Great Britain may be divided into two 
or more classes called first preference, second preference, etc., 
just as preferred stock in the United States may be divided 
into two or more classes called first preferred, second pre- 
ferred, etc. When, however, there is but one class of prefer- 
ence stock ahead of an ordinary stock in Great Britain the B 
or preferred stock is equivalent to second preferred stock in 
the United States. 

Deficiency as regards contributories. English term ; it 
means that the creditors may be paid in full, although the 
shareholders (stockholders), who are the contributories, lose; 
chiefly used in "winding up" proceedings. 



156 SMITH'S FINANCIAL DICTIONARY. 

Deficiency judgment. A judgment ordered by the court for 
any balance of a debt remaining after the security has been 
sold and the proceeds applied to the payment thereof. 

Del credere. The obligation undertaken by a factor or 
agent when selling goods on credit to hold himself liable in 
case of the failure of the purchaser to pay. 

A del credere commission is a commission charged for guar- 
anteeing the credit or solvency of a person to whom goods 
are sold. 

Delegation. Abbreviated name for letter of delegation ; see 
Letter of delegation. 

The term delegation is also used when an original debtor 
presents to his creditor a third person who becomes obligated 
in his stead. 

Deliver ticket. A memorandum ticket sent by the seller 
of stocks or bonds to the buyer in confirmation of the trans- 
action previous to the delivery of the securities. For addi- 
tional information see Comparison. 

Delivery, A. Stocks and bonds are a delivery (are deliver- 
able) in fulfilment of contracts entered into on the New York 
Stock Exchange which meet all requirements of the exchange 
(see Rules for delivery) ; others are not a delivery (are not 
deliverable). 

The rules of the New York Stock Exchange are generally 
observed in transactions in stocks and bonds that take place 
elsewhere than on the exchange. 

The term delivery is also used in dealings in grain, cotton, 
coffee, etc. 

When applied to negotiable instruments the term delivery 
means transfer of possession, actual or constructive, from one 
person to another. 

Delivery day. In dealings in grain, cotton and coflfee the 

first business day of the month is known as delivery day. As, 

however, all sales are at seller's option the seller may, on due 

notice to the buyer, make delivery on any day of the month in 

• which the contract matures. 

Delivery of stocks and bonds. The seller of stocks or bonds, 
when the transaction occurs on an exchange, must deliver the 
securities and collect for them at the buyer's place of business. 



SMITH'S FINANCIAL DICTIONARY. 157 

In a transaction on the New York Stock Exchange, where 
settlements are made daily, the broker who sells a stock 
regular way (in the regular way) delivers it to the buyer on 
the following day (except Saturday — when a stock is sold on 
Friday it is delivered on Monday). In the case of a cash 
transaction the stock is delivered the same day. 

For information as to what constitutes a delivery (often 
called good delivery) see Rules for delivery. 

Demand. As applied to a bill of exchange (draft) or prom- 
issory note this term means that the bill or note is payable 
on demand (on presentation to the one who is to pay it) and 
that no grace is allowed on it (unless, as in some states and 
countries, grace is allowed by law). 

It is a common practise to speak of a demand bill of ex- 
change (draft) issued by a bank or banker as a check, for it, 
like a check, is payable on presentation; a time bill is a draft, 
but as it is not payable on presentation it has not one of the 
principal requisites of a check. A sight bill is the same as a 
demand bill except in states and countries where grace is 
allowed by law on a sight bill. 

Demand bill. A bill of exchange (draft) payable on de- 
mand (on presentation). 

Demand note. A promissory note payable on demand (on 
presentation). 

Demand paper. Paper (promissory notes and bills of ex- 
change or drafts) payable on demand — that is, payable on pre- 
sentation. 

Demonetize. To divest of the character of standard money ,^ 
as the demonetization of silver. 

Demurrage. When railroad cars or vessels are detained 
beyond the stipulated time allowed for loading or discharging 
freight a charge for this loss of time is made which is called 
demurrage. 

The charge of i 1-2 pence per ounce that is exacted by the 
Bank of England for exchanging gold coin or notes for gold 
bullion is called demurrage. 

Denomination. A designation for an amount in money, or 
value, as a bill (piece of paper money) of the denomination of 
$100 or a bond of the denomination of $1,000 or a share of 



158 SMITH'S FINANCIAL DICTIONARY. 

stock of the denomination of $ioo or a Bank of England note 
of the denomination of £25. 

Deport. On the Paris Bourse this word means the same as 
backwardation in London or the same as premium in New 
York. 

Deposit. A deposit in a bank is money (or checks, drafts, 
etc.) placed in the bank to the credit of the one so placing or 
depositing it. 

A general deposit with a bank is a deposit received and 
placed with the funds of the bank to be loaned to customers 
and used in the general business with other funds of the bank. 
A special deposit is a deposit for safe keeping; to be kept as 
received until called for. 

Deposit account. In Great Britain a deposit account in a 
bank is one in which money deposited remains on deposit by 
agreement for a specified time and draws interest at a specified 
rate. On the other hand, a current or drawing account is one 
which may be added to and drawn against at will — at any 
time. 

Depositary. An individual (or firm) with whom funds or 
property is deposited It is a common practise to designate as 
a depositary a bank, trust company or other financial institu- 
tion with which funds or property is deposited ; the correct 
designation is depository ; see Depository. 

Deposit book. The book held by a depositor in a bank in 
which are entered the sums placed to his credit and in which, 
when a balance is struck at intervals, the amount of the debits 
also is entered. 

Deposit on a contract. A deposit to guarantee the fulfil- 
ment of a contract. For additional information see Mutual 
deposits on a contract. 

Depositor. One who deposits money (or the equivalent of 
money, as checks, drafts, etc.) in a bank to be placed to his 
credit is a depositor. 

A bank agrees with a depositor that it will pay out his 
money in accordance with his directions and not otherwise. 
If he orders money to be paid to a specified person and then 
revokes the order before the bank has either made the pay- 
ment or obligated itself to do so (as. for instance, by certify- 



SMITH'S FINANCIAL DICTIONARY. 159 

ing the check) it is the duty of the bank to obey the revocation 
and refuse to make the payment. If it pays the check not- 
withstanding the revocation the payment cannot be charged 
against the depositor. 

In a case in New York state an agreement was entered into 
between the depositor and the bank to the effect that the bank 
would endeavor to execute all orders revoking checks, but that 
the depositor was not to hold it liable for damages in case it 
failed to do so. The bank paid an uncertified check after 
notice had been given to it not to do so and the court held it 
liable, notwithstanding the terms of the agreement betw^een 
the depositor and the bank. The decision was upon the ground 
that the bank was bound to use ordinary diligence to obey all 
orders revoking checks and by failure to do so it became liable, 
as any agent is liable for negligence, notwithstanding its 
agreement with the depositor. 

In New York state the court has held that a bank cannot 
"disobey his (a depositor's) orders, either wilfully or inno- 
cently and then claim a new and different relation with rights 
inconsistent with such as before existed. In paying a draft 
after payment has been stopped a bank cannot be protected 
without an essential change in the accustomed and commonly 
understood duty which it owes to its depositor or a total dis- 
regard of its obligation to him." 

Depository. A bank, trust company or other financial in- 
stitution with which funds are deposited ; or a safe deposit 
company, storage or warehouse company or other concern 
with which papers or property may be deposited for safe keep- 
ing. When an individual or firm receives deposits of money, 
papers or property the word depositary applies. 

Deposit rate. The rate of interest allowed by a bank on 
deposits. 

Deposit slip. The printed form upon which a depositor in 
a bank enters the amounts of checks, money, etc., to be placed 
to his credit in the bank. 

The English name for deposit slip is credit slip or paying in 
slip. 

Depreciated currency. Paper money is a depreciated cur- 
rency when its purchasing power as compared with gold has 



i6o SMITH'S FINANCIAL DICTIONARY. 

fallen, or in other words, when prices as expressed in paper 
money have risen. 

If loo gold dollars cost 200 paper dollars gold money is at a 
premium of 100 per cent and paper money is at a discount of 
50 per cent. The same holds true of silver or any other form 
of money which for any reason is less valuable than the money 
which is the actual standard. 

Destroyed or defaced securities. A new certificate can be 
secured in place of a destroyed stock or bond by furnishing 
proof of destruction, together with a bond of indemnity for 
double the amount of the stock certificate or bond. A de- 
faced stock certificate or bond, if the defacement does not 
obliterate amounts and names, can generally be exchanged for 
a new one by ordinary transfer. 

Dicker. Designation for a petty business negotiation or 
trade. To dicker is to bargain or to haggle over price or 
terms. 

Dies gratia. Days of grace. 

Dies non. Days on which, owing to some circumstance or 
event, no business is transacted. 

Difference. The difference between the purchase and sale 
price of a stock ; also, the amount of profit or loss on a trans- 
action. 

Speculating for differences means that persons buy securi- 
ties with the intention of later selling them or sell securities 
short with the intention of later buying them — the sole pur- 
pose being to profit by differences between buying and selling 
or between selling and buying prices. 

Also see Market difference. 

At a clearing house for banks only differences (or balances) 
are settled. For information see Clearing house of the asso- 
ciated banks of New York. 

For information as to the settlement at a clearing house of 
differences in transactions in stocks see New York Stock Ex- 
change clearing house. 

Also see Ringing out. 

On the London Stock Exchange differences are paid or re- 
ceived in each fortnightly settlement on such contracts, or 
bargains as they are called in London, as are carried over— 



SMITH'S FINANCIAL DICTIONARY. i6i 

that is, contracts under which the receipt and payment (or the 
dehvery and collection) for the securities designated in them 
is to be continued to the next settlement. 

There is an official settling price for each security which is 
called the "making-up" price. One who carries over (con- 
tinues) a contract pays or receives, as the case may be, the 
difference between the making-up price and the price specified 
in his contract. Then the making-up price becomes the con- 
tract price and is the basis for the next settlement, which may 
or may not be the final settlement, for the contract may be 
carried over again. 

Differential duty. Import duty or tax imposed unequally 
on the products of different nations. 

Differential rate. A lower rate by one transportation line 
than by another reaching the same point or a lower rate to 
one point than to another point competing for the same traffic. 

Digested. For the application of this word in dealings in 
securities see Absorbed. 

Dime. (Formerly disme). The silver coin of the United 
States that is worth lo cents ; it weighs 38.58 grains, is .032 
inch thick, and its diameter is .7 inch. 

Direct exchange. Exchange between two places — that is, 
between two places in one country or between a place in one 
country and a place in another country. For example, ex- 
change between New York and Chicago or exchange between 
New York and London is direct exchange. 

Indirect exchange is where three or more places are in- 
volved ; see Indirect exchange. 

Direct liabilities. Obligations or debts which are deter- 
mined and not contingent and which are an undisputed claim. 

Director. A member of a body (board of directors) chosen 
(elected) by the stockholders of a corporation to direct and 
manage the affairs of the corporation. The board of directors 
selects and elects from its members the president, vice-presi- 
dent and other general officers of the company. 

The directors of a corporation are usually elected annually. 
There is, at any rate, an annual election for directors, but when 
a board of directors is divided into classes the terms of the 
directors are for more than one year. Thus, if a board of di- 



i62 SMITH'S FINANCIAL DICTIONARY. 

rectors is divided into three classes the directors are elected 
to serve three years, but each year the term of one class ex- 
pires. The term of class B (or class 2) expires the year after 
the term of class A (or class i) and the term of class C (or 
class 3) expires the year after the term of class B. 

Under such an arrangement, of course, when the board of 
directors is originally created the directors of class A (or class 
i) are elected to serve one year, the directors of class B (or 
class 2) to serve two years and the directors of class C (or 
class 3) to serve three years. Thereafter directors are elected 
to serve the full term of three years, except as vacancies are 
to be filled, when directors are elected to serve for unexpired 
terms, whatever the duration of them may be. 

A board of directors can act legally only as a board ; the 
action or promise of a director by himself is not binding on 
the board or on the company. 

If a director enters into a contract with his corporation he 
does not thereby forfeit his position as director. Neither is 
the contract void, but it is voidable at the suit of any dissatis- 
fied stockholder. 

When it is provided by the law under which a corporation 
is organized or by its by-laws how and when a resignation is 
to become effective that rule governs. If there is no such pro- 
vision the resignation becomes effective as soon as it is com- 
municated in writing to the board of directors and its formal 
acceptance or entry upon the minute books of the corporation 
is not necessary. 

The fee paid to a director for attending a meeting is usually 
$10 and the fee is usually paid in a single gold piece. 

Directorate. A word sometimes used in place of board of 
directors. 

Director of the Mint. The Director of the Mint is the chief 
officer of the Bureau of the Mint in the Treasury Department 
of the United States. He has the general direction of the 
operations of the mints and assay offices of the United States, 
subject only to the authority of the Secretary of the Treasury. 

Directory. A word sometimes used in place of board of 
directors. 

Direct tax. A tax paid at first hand by the owner of the 



SMITH'S FINANCIAL DICTIONARY. 163 

thing taxed, as land, in distinction from excise and customs 
dues. 

Disagio. The discount charged for cashing foreign or de- 
preciated currency. 

Discharge of record. The entry of a release, satisfaction or 
acquittance of a debt of record (a judgment). 

Discharging a contract. The act of making a contract null. 

Discount. The amount taken off; allowance for prompt 
payment ; interest deducted or collected in advance. 

A promissory note is discounted when the lender on it de- 
ducts (or collects) the amount of the interest on the note at 
the time he advances money on it. 

A bill of exchange (draft) is discounted when the purchaser 
buys it for less than its face value ; the discount is the differ- 
ence between the face value of the draft and the amount paid 
for it. 

In discounting interest-bearing paper the interest should 
first be charged on the face amount of the paper and then cred- 
ited on the amount of the discount. Illustration : At 6 per 
cent the discount on paper for $10,000 having one year to run 
is $600, but as this $600 is not paid over interest has to be 
allowed on it by the lender at the same rate as is charged by 
the lender on the whole $10,000. The interest on the $600 
amounts to $36 which would, therefore, make the sum received 
by the maker of the paper $9,436. 

When non-interest-bearing paper is discounted the discount 
is the difference between the face value of the note (the 
amount w^hich is to be paid at maturity) and the amount paid 
for the note. 

Foreign bills of exchange are not said to have been dis- 
counted, but instead to have been sold. 

Discount bank. Same as bank of discount ; a bank which 
discounts (buys) promissory notes and bills of exchange. 

Discount broker. Same as note broker ; one who negotiates 
the sale of commercial paper (promissory notes and bills of 
exchange or drafts). 

Discount clerk. The particular duty of a discount clerk in 
a bank is to keep a record of and retain the custody of notes 
and drafts until their maturity, when they are delivered to the 



i64 SMITH'S FINANCIAL DICTIONARY. 

note teller, who attends to the collection of the amounts due 
on them. 

Discount house. This term is applied to a firm or company 
in Great Britain which makes a business of discounting bills 
(the paper of merchants and others). 

Discretionary account. In speculation (as in stocks) a dis- 
cretionary account is an account the handling of which is en- 
trusted to the broker with whom it is opened. 

Sometimes fraud is practised by a dishonest broker in 
handling a discretionary account. Such a broker will retain 
profit for himself while charging loss to the customer. 

One way in which a broker may practise fraud while im- 
parting a semblance of honesty and regularity to an operation 
is to make an actual purchase and simultaneously make an 
actual sale ; then, after there has been a change (an advance, 
or a decline) in the price, make another actual purchase and 
simultaneously an actual sale. The difference between the 
price at which the first transactions are made and the price 
at which the second transactions are made the broker may de- 
duct from the amount deposited with him as margin by the 
customer and keep for himself while reporting it to the cus- 
tomer as a loss sustained. The broker is in a position to show 
by others with whom he dealt that actual transactions were 
made, but need not reveal such of the transactions as would 
disclose sales offsetting the purchases and purchases offsetting 
the sales, by which one transaction voided another, with the re- 
sult that, as a fact, no stock was really at any time carried 
(held) by the broker. 

Discretionary order. An order given to a broker to execute 
in his discretion ; entrusting money to a broker to speculate 
with as he sees fit, but for the benefit or risk of the owner. 

For additional information see Discretionary account. 

Discretionary pool. Several contribute capital to a pool 
the manager of which is allowed to use the money in specula- 
tion (or in a deal) in his discretion, or in other words, as he 
sees fit; similar to a blind pool. 

Discretionary trust. One requiring for its proper adminis- 
tration by the trustee the application of prudence and judg- 
ment. 



SMITH'S FINANCIAL DICTIONARY. 165 

' Discrimination in loans. Means that certain securities are 
refused as collateral by lenders after having been accepted 
as security for previous loans. These securities are discrimi- 
nated against, usually, because a change in market conditions 
has rendered them especially uncertain in value. 

Discussion. A proceeding upon the part of a surety by 
which the property of the principal is exhausted before resort 
can be had to the surety. 

Dishonored. Said when acceptance of a bill of exchange 
(draft) is refused on presentation ; or when payment of a bill 
of exchange or promissory note is refused at maturity. 

Disme. Former spelling of dime, the silver coin of the 
United States worth 10 cents ; see Dime. 

Dissolution. The annulment of a contract; also the ending 
of a partnership or a corporate existence. 

Dividend* A profit paid to a holder of stock. 

A cash dividend is one payable in cash, that is, by check 
which calls for cash ; a scrip dividend is one payable in scrip, 
or in other words, a due bill, usually bearing interest at the 
legal rate and usually convertible into stock, but having no 
voting power and entitled to no dividend until converted into 
stock ; a stock dividend is one payable in the stock of the 
company which declares such a dividend or occasionally in the 
stock of a company owned by it ; a cumulative dividend is a 
dividend which if not paid regularly or in full accumulates and 
must be paid in the future ; a non-cumulative dividend is a divi- 
dend that does not accumulate and therefore if not paid regu- 
larly or in full has not to be paid in the future ; accumulated 
dividends are cumulative dividends past due ; accrued dividend 
is the proportion of a regular dividend not yet payable that has 
accumulated at a given time after the date of payment of the 
last preceding dividend. 

A cash dividend is sent by check to the post office address 
of the owner of the stock. Due notice of change of address 
should, therefore, be given. The old address should be given 
as well as the new one. 

When a dividend is paid on a stock during the pendency of a 
contract for the sale of the stock the seller of the stock receives 



i66 SMITH'S FINANCIAL DICTIONARY. 

the dividend and pays it to the buyer of the stock on the settle- 
ment of the contract, together with interest on it. 

Brokers charge i per cent of the amount of dividends for 
collecting them or for paying them, but when a dividend is in 
scrip or stock the i per cent is on the market value and not 
on the par value. 

The closing of the stock transfer books of a company estab- 
lishes the right to dividends as between the company and those 
who claim the dividend, but it does not aflfect the rights of a 
buyer and a seller of stock as between themselves. When 
stocks are sold at an exchange the rules of that body deter- 
mine whether the seller or the buyer is entitled to the divi- 
dends. In a sale made elsewhere the seller and buyer may 
make such agreement as may be mutually satisfactory. If the 
sale is not made at an exchange and the question of the 
dividend is not determined by mutual agreement the seller 
is entitled to all dividends on the stock declared before the 
sale and the buyer is entitled to all declared after the sale. It 
is of no importance that a transfer may not have been made 
upon the books or that the stock may not have been delivered 
or that the dividend is not payable until some time after the 
date on which it is declared. 

When a speculator is short of a stock (has sold stock which 
he did not own) on which a dividend becomes due he has to 
pay the amount of the dividend to the person from whom he 
borrowed stock to make delivery to the one to whom he sold 
the stock. 

Dividend off. Said when a dividend due is not included in 
the sale. A stock sold ex-dividend is sold with the divi- 
dend off. 

Dividend on. Said when a dividend on a stock goes with 
the stock to the buyer. 

The corresponding term on the London Stock Exchange 
is cum dividend; cum means with (included). 

Dividend warrant. English name for a check issued in pay- 
ment of a dividend. 

Divisional bond. A bond issued under a mortgage on prop- 
erty in one division of a railroad. 



SMITH'S FINANCIAL DICTIONARY. 167 

Divisional coin. Same as fractional or subsidiary coin ; see 
Subsidiary coin. 

Divisional mortgage. A mortgage covering the property 
included in one division of a railroad. 

Documentary bill for acceptance. A time draft (bill of ex- 
change) drawn on the receiver or consignee of a shipment of 
property and accompanied by documents. The documents, 
comprising the bill of lading, policy of insurance, etc., are 
attached to the draft and are surrendered on the acceptance of 
the draft by the consignee so that the consignee may at once 
obtain possession of the property instead of waiting until 
actual payment of the bill is made. 

}£xample : A in New York makes a shipment of goods to B 
in London for which payment is to be made at some future 
time, say in three months. It is not necessary for A to wait 
three months for his money. A draws on B for the amount of 
the goods (that is, the amount in money) and attaching 
to the draft the bill of lading for the goods, with policy 
of insurance, etc., sells the draft to a dealer in foreign 
exchange in New York, who forwards it to his corre- 
spondent in London. The correspondent in London presents 
the bill to B in London for acceptance. B writes on its face 
his acceptance (an acknowledgment of the obligation and a 
promise to pay it when due) and the bill of lading is sur- 
rendered to him. Possession of the bill of lading gives him 
possession of the goods. In the meantime A has been paid for 
the goods while B when he formally obligates himself to pay 
for them knows not only that they have been shipped but also 
holds (in the bill of lading) title to them. 

A draft payment of which is to be made on presentation (a 
sight draft, in other words) is, when accompanied by docu- 
ments, termed a documentary bill for payment, as distin- 
guished from a documentary bill for acceptance. 

Documentary bill for payment. A draft (bill of exchange) 
drawn on the receiver or consignee of a shipment of property 
to which are attached documents, comprising the bill of lading, 
policy of insurance, etc. On the payment of the draft the bill 
of lading, together with the other papers, is surrendered to the 
consignee so that he may obtain possession of the property. 



i68 SMITH'S FINANCIAL DICTIONARY. 

Example : A in New York makes a shipment of goods to B 
in London for which immediate payment is to be made. A 
makes a draft on B for the amount of the goods (that is, for 
the amount in money) and attaching to it the bill of lading 
for the goods sells the draft to a dealer in foreign exchange in 
New York, who forwards it to his correspondent in London 
for collection from B in London. Thus, A receives pay for 
his goods as soon as they are shipped. He has not to ship the 
goods, wait for them to reach London, and then wait for a 
ship to bring back gold in payment for them, nor even to wait 
for the mail to bring back a draft bought by B in London on 
some bank or banker in New York ; much less has he to wait 
for B to receive the goods, draw a check on his own (B's) 
bank in London, and send it to him (A in New York), who 
would have to sell the check to some dealer in foreign ex- 
change in New York. B, by receiving the bill of lading for 
the goods when the draft is presented to him for payment, 
knows not only that the goods have been shipped to him, but 
also, by possession of the bill of lading, holds actual title 
to them. 

Documentary bill (of exchange). A bill of exchange to 
which are attached certain documents, usually the bill of lad- 
ing, policy of insurance and instrument of hypothecation. For 
additional information see Documentary bill for acceptance ; 
also see Documentary bill for payment. 

Documentary commercial bill (of exchange). A bill of ex- 
change drawn against merchandise or manufactures or pro- 
duce (as grain, cotton or provisions, etc.) to which are at- 
tached documents, such as bill of lading, policy of insurance 
and instrument of hypothecation. 

For additional information see Documentary bill for accept- 
ance ; also see Documentary bill for payment. 

Dollar. The monetary unit of the United States, equal to 
one-tenth of an eagle, or lOO cents (about 4s. i i-3d. English 
money). 

In theory the gold dollar contains 25.8 grains, nine-tenths 
fine. As a matter of fact the gold dollar is no longer 
coined, being too small for convenience. The dollar is repre- 
sented in actual circulation bv silver and notes. The silver 



SMITH'S FINANCIAL DICTIONARY. i6q 

dollar weighs 412 1-2 grains (371 1-4 grains of silver and 
41 1-4 grains of alloy). 

The United' States silver dollar was based upon the Spanish 
milled dollar, the piece which probably first bore the raised 
and corrugated edge, which was devised to prevent the re- 
duction of the coin by cutting off the rim. The name is de- 
rived from the German thaler, which apparently was first 
issued by a community of Joachims-thal in South Germany, 
whose pieces were of known purity and unchanging value. 

The dollar is also the unit of value of Canada, which is a 
gold standard country, but has no gold coins of its own. 
Neither has Canada a silver dollar ; its silver coins are of de- 
nominations less than $1. The dollar is also the unit of value 
of Newfoundland (gold standard). Newfoundland has no 
silver dollar, but it has a $2 silver piece and it has pieces of 
less denomination than $1. 

Coins of other countries comparing with the dollar are the 
thaler of Germany, Norway, Sweden and Denmark, the pis- 
tole or piece-of-eight of Spain, the 20-piastre piece of Egypt, 
the peso of Mexico and Central America and the gourde of 
Hayti. 

Dollar bond. London Stock Exchange name for a bond the 
principal of and interest on which are payable in dollars, as is 
the case with an American bond. 

Dollar exchange. Bills of exchange (drafts) drawn in a 
foreign country and payable in America; so called because 
payment is to be made in dollars. 

Exchange drawn in America for a certain number of dollars, 
although to be paid in a foreign country in the equivalent in 
foreign money, is also dollar exchange. 

Dollar mark. The sign $, meaning dollar or dollars when 
placed before a number; it is, according to some authorities, 
U S in composite form. 

Dollar of the daddies. A name applied to the silver dollar 
during the agitation for free silver coinage. 

Dollar stock. London Stock Exchange name for a stock 
made out in dollars, as an American stock. 

Domestic commerce or trade. Same as 'home or internal 



lyo SMITH'S FINANCIAL DICTIONARY. 

commerce or trade ; commerce or trade exclusively within the 
limits of a particular country. 

Domestic exchange. Also called inland exchange ; ex- 
change between two places in the same country ; in other 
words, drafts or orders for money drawn at one place and 
payable at another place in the same country. 

Drafts constitute the commonest form of domestic exchange 
and are purchased for use as such by both banks and indi- 
viduals. When drawn against persons to whom merchandise 
has been sold they are known as commercial bills. 

Domestic exchange is calculated in only one kind of money,, 
whereas foreign exchange is calculated in two kinds. 

Following is an illustration of the use of domestic exchange :: 
A merchant in Chicago who owes for goods purchased in New 
York can in discharging his obligation buy of a bank or 
banker in Chicago a bill of exchange, or in other words, a 
draft or order for money which is payable in New York by 
the correspondent (a bank or banker) of the Chicago bank or 
banker. 

Again, a shipper in Chicago may forward grain to New 
York payment for which is due on the arrival of the grain 
at destination. He draws a draft or order on the consignee 
(the receiver of the grain in New York). This bill of ex- 
change is attached to the bill of lading (the receipt from the 
railroad or other carrying company which transports the 
grain) and is sold to a bank in Chicago. The Chicago bank 
sends it to its correspondent bank in New York, which collects 
and places to the credit of the Chicago bank the amount of the 
draft (bill of exchange). 

If a bank in Chicago, for instance, has an inadequate bal- 
ance, or in other words, too small an amount to its credit with 
its correspondent in New York it may pay a premium, or more 
than the face value of it, for a draft payable in New York to 
be used in increasing its balance in New York ; likewise, in 
such circumstances, if it sells a draft on New York it may 
charge a premium, or more than its face value, for it. On the 
other hand, if it has too large a balance in New York and 
^an find more profitable use for its money at home it may buy 
a draft on New York only at a discount, or less than its face. 



SMITH'S FINANCIAL DICTIONARY. 171 

and it may sell one at little or no premium, and perhaps at a 
discount. 

Exchange is in favor of one point and against another point 
when the necessity lor remittance from the second point to 
the first point exceeds the necessity for remittance from the 
first point to the second point. 

Instead of saying exchange on Chicago or exchange on 
Boston, etc., it is the common practise to abbreviate the ex- 
pression to Chicago exchange or Boston exchange, etc. 

Domestic exchange loan. There is practically no such thing 
as a loan of domestic exchange. When a loan is obtained 
from a bank it ordinarily delivers to the borrower a check 
on itself made out by its cashier (it is called a cashier's check) 
which the borrower may use in the place where issued or may 
transmit to any other place. 

The bank will, if desired, furnish to the borrower a draft on 
a bank in some other place, but this draft lacks many of the 
characteristics of a bill of exchange. The borrower merely 
borrows (obtains a loan) and it is a matter of arrangement 
with the bank as to the form in which he shall receive the 
amount which he borrows. 

Also see Foreign exchange loan. 

Domestic exchange rates. Rates for domestic exchange is- 
sued in New York are not published. To ascertain the rates it 
is necessary to make inquiry of banks ; the business is almost 
entirely in the hands of the banks. 

At other points the rates on New York and also on a few 
other important centres like Boston, Chicago, San Francisco, 
Philadelphia and St. Louis are published. When quoted in 
cents (or dollars) it is meant that the rate is so much premium 
or discount, as may be specified, on each $1,000. In some in- 
stances the rate is in percentage — so much per cent premium 
or discount. 

Domestic trade. Same as internal trade or commerce ; 
home trade ; trade within the boundaries of a country. 

Domiciled. When paper (a promissory note or a bill of ex- 
change or draft) is made payable in a certain place it is domi- 
ciled in that place. 

Domiciliated. Same as domiciled ; see Domiciled. 



172 SMITH'S FINANCIAL DICTIONARY. 

Dormant account. An account to which neither a credit 
nor a debit entry has been added for a protracted period; in 
speculation, an account in which a protracted period has 
•elapsed since entries of transactions were made. 

Dormant judgment. A judgment on which the right to 
issue execution has expired from lapse of time. 

Dormant partner. A partner who participates in the profits 
of the firm, but takes no part in the transaction or control of 
the firm's business. 

Double-eagle. The name given to the $20 gold coin of the 
United States; weight, 516 grains; thickness, .077 inch; diam- 
eter, 1.35 inches. 

Double entry. The system of bookkeeping by which two 
entries, one credit and one debit, are made of every transac- 
tion. 

In double entry a day-book, journal and ledger are the es- 
sential books, although a cash-book, bill-book, stock-book, in- 
voice-book, etc., are usually added. By the double entry sys- 
tem every transaction is made to appear on the record as both 
debtor and creditor by observance of the principle that, in 
every instance, the thing obtained is debtor to the thing given 
and the thing given is creditor of the thing obtained. 

Double liability. When the liability is for a sum double the 
original amount. 

The holder of bank stock who has paid in full for it still is 
liable up to the amount of its face value in case of the inability 
of the bank to pay its depositors and other creditors in full. 

Double-name paper. Paper (a promissory note or a bill of 
exchange) that is indorsed. The term two-name paper is 
sometimes used. 

Double option. London Stock Exchange name for the call 
of more, the put of more, or the put and call when combined. 
Another name is compound option. In New York a put and 
call combined are called a spread if two prices are named in 
the paper (a put price and a call price) or a straddle if only one 
price is named in it (at which price the stock may be either 
put or called). 

Double price. On the London Stock Exchange the jobber 
(or dealer), who will either buy or sell, names a price at which 



SMITH'S FINANCIAL DICTIONARY. iTS 

he will buy and another price at which he will sell, as for ex- 
ample, 99 3-4 at which he will buy and icmd 1-4 at which he 
will sell. In such a case the quotation would be printed: 
99 3-4—100 1-4. 

Double standard. The double standard of values exists 
where by law it is enacted that gold and silver shall be ac- 
cepted as a legal tender for debt at an established ratio. 

As a matter of fact in all such countries gold is the real 
measure of value and is admitted to coinage without restric- 
tion, while silver is coined only in limited quantities and under 
governmental restriction to serve as representative money. 
Silver retains its parity with gold because of the limitations on 
its coinage and because of the fiat of the government under 
whose authority it is coined. 

The mere possession by a country of the double standard 
is not the same thing as bimetalism, an essential feature of 
which is a mint open to the coinage of any quantity of either 
gold or silver that may be brought to it. 

Doubtful assets. Assets the value of which is questioned. 

D. P. Abbreviation for document (documentary bill) for 
payment; used in foreign exchange dealings. See Document- 
ary bill for payment. 

Draft. An order drawn by one person on another for the 
payment of money to a third. It is generally payable at or 
collectable through a bank or other financial agency. There 
is practically no difference between a draft and a bill of ex- 
change. The term draft, however, is commonly applied to 
an order for money payable within the United States, the term 
bill of exchange being applied' to an order payable in a for- 
eign country. 

A promissory note is a bill of exchange, but a time draft be- 
comes, in fact, a note upon its acceptance by the drawee — the 
one upon whom it is drawn. The distinction between a draft 
and a check is material in some respects. A draft is dependent 
for its payment upon its acceptance by the person on whom it 
is drawn. In case the one on whom it is drawn refuses to 
accept it or pay it no criminal liability attaches to the drawer, 
whereas a check is drawn against a supposed deposit of 
money or a previously established credit and should there be 



174 SMITH'S FINANCIAL DICTIONARY. 

no funds to meet it the drawer is liable to criminal prosecu- 
tion, and a refusal of the bank on which a check is drawn to 
pay it, if there are funds in hand, subjects the bank to civil 
action for injury to the drawer's credit and reputation. 

After a draft is accepted it becomes a promise to pay on the 
part of the acceptor and he can be held thereon as on a note. 

The holder of a draft who gets it discounted at his bank 
must indorse it and thus he also becomes responsible for it. If 
it goes through several hands each holder must indorse it be- 
fore parting with it. It acquires strength with each indorse- 
ment since all the persons who have indorsed it are successive- 
ly responsible for its payment. 

In the case of a draft made in one state and accepted for pay- 
ment in another state any question as to its legality must be 
tested in the state where it is payable. When the question of 
interest is involved interest is chargeable at the legal rate of 
the state where the draft is payable. 

Also see Bill of exchange. 

Drawback. Same as rebate; when part of an amount paid 
is returned such return is designated a drawback. 

A drawback on imported goods on which duty has been paid 
IS a repayment, in part or in whole, of the duties upon the 
subsequent exportation of the same goods in their original or 
in another form. 

A drawback on freight rates is a repayment, in part, of the 
rates (or charges). 

Drawee. The party who is to pay a bill of exchange or 
draft (or other order for the payment of money). 

Drawer. The party who draws (issues) a bill of ex- 
change or draft (or other order calling for the payment of 
money). 

Drawing account. In Great Britain a drawing account 
means a bank account which permits the drawing of money at 
any time ; a deposit account means money left in the bank for 
a stated period at an agreed rate of interest. 

Drawn bond. One drawn for redemption, that is, for pay- 
ment. 

Such a bond belongs to an issue a certain amount of which 
(so many bonds) is drawn for redemption at stated intervals. 



SMITH'S FINANCIAL DICTIONARY. 175 

A drawing takes place and the bonds bearing the numbers 
drawn are redeemed. The numbers are drawn by a disinter- 
ested person from a box, basket or other receptacle. 

Drive. A stock market term, meaning a vigorous attempt 
to force prices down ; an onslaught. 

Drummer. A colloquial name for a commercial traveler; 
an agent or representative of a mercantile or manufacturing 
•concern who travels and solicits orders. 

D. R. W. These letters stand for Deutsche reichs waehr- 
ung; that is, German imperial currency (money). 

Dry exchange. Term for the act of disguising and cover- 
ing usury by which something was represented as having 
passed on both sides when in fact nothing passed on one side. 

Ducats. A colloquialism meaning money. For instance, to 
say "I have the ducats" means I have the money. 

Due. Owing and demandable. 

Due bill. A written acknowledgment of debt. 

In some cities checks are not certified by banks, but instead 
due bills, so-called, are employed. When guaranty of the 
payment of a check by a bank is desired the check is delivered 
to the bank which retains the check and issues in place of it a 
aue bill payable by the bank itself. This due bill may be 
deposited in another bank and collected through the clearing 
house the same as a check. 

A due bill given in a stock transaction foi a dividend de- 
clared but not yet payable does not carry interest — that is, 
interest on it cannot be collected by the holder of the due bill 
from the maker of it. 

Dull. This word when applied to markets has a different 
meaning in New York and London. In New York it merely 
means quiet ; in London, quiet and inclined to weakness. 

Dumb bid. Said when the amount which the owner of 
property offered at auction is willing to take is secretly com- 
municated to the auctioneer and no lower bid is to avail. 

Dummy director. One who has been elected a director to 
serve temporarily (as in an interim) or to represent some one 
.else or to meet legal requirements. 

In the organization of a new corporation (company) it is 



176 SMITH'S FINANCIAL DICTIONARY. 

often the case that the board of directors as at first consti- 
tuted is a dummy board which is succeeded by a real board. 

Dummy incorporator. One who serves in place of a real 
party in interest to meet legal requirements. 

In the organization of a new corporation (company) it is 
often the case that the incorporators are dummies who serve 
either for convenience in effecting the incorporation or for 
the purpose of concealing the identity of the real parties in 
mterest. 

Dummy stockholder. One who holds (in whose name is 
made out and stands) stock which in fact belongs to another. 

It is a common practise for large owners of stocks to have 
their stocks made out in the names of clerks and brokers. The 
purpose is to conceal the actual ownership. 

When a broker buys stock for a speculator the certificate is 
not made out in the name of the speculator. A certificate 
signed (assigned) in blank (see Assigned in blank) by the 
original owner is received by the buying broker from the sell- 
ing broker and this certificate may on the resale of the stock 
be delivered to the new buying broker, and so on, the same 
certificate continuing to serve indefinitely in transactions. 

Dun's. The name of one of the commercial agencies. 

Duplicate check. When a check has been lost or stolen 
payment of it is stopped (see Stop payment) and a new check 
is issued, usually bearing the same date and number. Trans- 
versely (up and down) across the face of it is written, gener- 
ally in red ink, the word ''Duplicate." 

Dutch standard. A standard of qualities or grades of sugar 
formerly recognized in commercial usage and in tariff legisla- 
tion. It consisted of i6 samples, representing as many differ- 
ent grades of purity, from the darkest to the whitest, put up 
under the seal of the Dutch government — the government of 
the Netherlands (Holland). 

Duty. An impost, particularly a tax upon goods imported 
(and in some countries upon goods exported). 



SMITH'S FINANCIAL DICTIONARY. 177 



E 



E. As printed on the tape by the stock ticker this letter 
means east or eastern. 

Each way. When a commission of so much each way is 
charged by a broker in stocks or commodities (grain, cotton, 
coffee, etc.) the commission for buying is one way and the 
commission for selling is the other way. 

Eagle. The name given to the $10 gold coin of the United 
States; weight 258 grains; thickness .060 inch; diameter 1.05 
inches. The name is derived from the likeness of an eagle 
stamped upon the coin. A double-eagle is a $20 piece, a half- 
eagle is a $5 piece and a quarter-eagle is a $2.50 piece. 

E. & O. E. Errors and omissions excepted ; an amplification 
of E. E. Brokers and also merchants append these letters to 
their accounts so that they may not be prevented from correct- 
ing errors and supplying omissions which afterward may be 
discovered. - 

Earnest money. Money given to bind a bargain. Arrha, 
the Latin designation, is occasionally used. 

Earnings. The earnings of a company are its receipts. 

For particular information as to the earnings of a railroad 
see Railroad earnings. 

Easier. Said when rates, prices or markets are lower. 

E. E. Errors excepted. See E. & O. E. 

Effective circulation. Money in the Treasury and owned 
by the government and that in circulation and in banks. This 
is available money — that is, money that is in use or can be put 
in use. 

Elastic currency. Elastic currency is currency the volume 
of which would be regulated automatically by the demands of 
business. In order to attain that end it would be necessary to 
authorize the issue of circulating notes by banks under such 
conditions as would make it profitable to the banks to increase 
the volume of their oustanding notes in times of trade activity 
and large demand for money and make it expensive for them 



17^ SMITH'S FINANCIAL DICTIONARY. 

to maintain a large volume of outstanding circulation in times 
of business depression and stagnation in the money markets. 

Various propositions to provide for such a currency have 
been advanced, all based on the theory of note issues secured, 
at least in part, by the general assets of the banks instead of by 
a deposit of bonds and regulated by a graduated tax on the 
amount of circulation issued, the high tax being expected to 
discourage excessive issues, except at times when the need for 
more money is marked and imperative and when its absence 
would result in stringency and abnormal interest rates, thus 
discouraging enterprise and restricting business. 

There was a plan at one time for an elastic currency based 
on bonds. It was proposed that the government should issue 
bonds which might at will be converted by the holders into 
currency and which might be reissued by the government for 
currency. The bonds were to bear interest only while out- 
standing. It was assumed that when money was in excessive 
supply the bonds would be held in preference to currency, 
while oh the other hand, when the supply of currency was in- 
adequate the deficiency could readily be made up by converting 
bonds into currency. The bonds were to be sold by the gov- 
ernment for gold which was to be held as a special fund so that 
when bonds were turned back to the government the currency 
exchanged for them would be secured by the gold received for 
the bonds. Two objections to the plan were raised and caused 
it to be abandoned. One objection was that the proceeds of 
the bonds would not be available for the general purposes of 
the government. The other objection was that the plan made 
the government responsible for the regulation of the money 
market and imposed an additional tax on the people to the ex- 
tent of the interest paid on the bonds. 

As far back as 1869 a plan for an elastic currency was laid 
before Congress. It was known as the 3.65-bond plan. It 
was proposed that the government should issue bonds bearing 
interest at 3.65 per cent a year, both principal and interest pay- 
able in greenbacks (United States notes). Holders of the 
bonds were to be permitted to exchange the bonds for green- 
backs at anv time and to receive interest at the rate of 3.65 per 



SMITH'S FINANCIAL DICTIONARY. 179 

cent (i cent a day on each $100) while they had been outstand- 
ing. Likewise, holders of greenbacks were to be permitted to 
exchange greenbacks for the 3.65 bonds at any time. The 
scheme was pronounced ingenious but unstable and nothing 
came of it. 

Also see Asset currency ; also see Emergency currency. 

Embezzlement. Fraudulent appropriation of money or 
property held in trust ; a deficiency caused by a breach of trust. 

Emergency currency. The name applied to currency in- 
tended for temporary use in times of acute money stringency 
or financial panic. Many plans have been offered to provide 
for such an issue. The object has been attained indirectly in 
times past by the voluntary action of clearing house associa- 
tions in many cities. 

For example, in 1893 the clearing houses in New York, Bos- 
ton and Philadelphia issued in the aggregate $63,900,000 in 
clearing house loan certificates. These certificates were used 
m the settlement of balances between the member banks and 
an equal amount of money was released to supply the void 
made in the circulating medium by the heavy gold exports and 
the withdrawaf of money from the banks for hoarding and for 
current hand-to-hand use. In some Southern cities the 
clearing houses issued loan certificates in as small amounts 
as 25 cents for popular circulation, so urgent was the demand 
for currency. The question of the legality of this latter ac- 
tion was not raised at the time because the crisis was so acute 
that wisdom seemed to forbid any questionings that might 
make it worse. 

It is urged, however, by the advocates of an authorized 
method of emitting an emergency currency that definite legal 
means should be devised for similar situations in the future. 
Some advocate the organization of state clearing associations 
empowered to act under the combined credit of all the mem- 
ber banks ; others would give to individual banks, acting under 
the approval of the Comptroller of the Currency, the right to 
emit temporary notes ; while still others urge the organization 
of a great central bank, in which the other banks shall be 
stockholders, which shall have the power to provide a tempo- 
rary note issue for such emergencies. 



i8o SMITH'S FINANCIAL DICTIONARY. 

Also see Asset currency ; also see Elastic currency. 

Emission. Issuing or putting forth, as emission of bonds. 
An emission is the thing (or things) issued or put forth, as 
an emission of bonds or an emission of bank notes. 

Encash. To pay in money; for instance, to encash a check, 
draft or note is to pay it in cash. 

Endless chain. Name given to the process by which gold is 
taken from the Treasury by the presentation of United States 
notes (greenbacks), which, not being cancelled and retired, are 
reissued and become again available for the same purpose. 

Since the resumption of specie payments in 1879 nearly 
twice the amount of United States notes in existence has been 
redeemed in gold without extinguishing any of the debt they 
represent. The process is employed when gold is wanted for 
export or for hoarding in times of panic. 

During the years 1894, 1895 and 1896 commercial depression 
and fear that the monetary system of the country would be 
overturned by the success of the agitation for free silver coin- 
age caused such enormous withdrawals of gold from the 
Treasury that four separate issues of bonds, amounting in all 
to $265,000,000, were found necessary to maintain the gold 
reserve and prevent the suspension of payments on United 
States notes and Treasury notes. The Treasury notes are 
gradually being retired, but the United States notes, of which 
there are, in round numbers, $346,000,000, can only be retired 
by an act of Congress. So long as they are in existence they 
can still be used over and over for the withdrawal of gold from 
the Treasury. 

Endorse. See Indorse, which is the spelling preferably used 
in business and in law. 

Enface. To write or print on the face, as to certify a check 
or accept a bill of exchange (draft). 

Enfaced paper. A term applied to the promissory notes 
issued by the Government of India (known as rupee pnper) 
when they bear on their face notification that interest on them 
can be collected by presenting the notes at the Bank of Eng- 
land in London. The interest is paid in drafts payable in 
India. These drafts are readily bought by parties having re- 
mittances to make to India. 



SMITH'S FINANCIAL DICTIONARY. i8i. 

Enforced covering. Compulsory buying to cover (close) 
short contracts in stocks or bonds or in grain, cotton, etc. 

Engagement. Commitment ; an obligation assumed ; a con- 
tract entered into ; a promise. 

As a commercial term engagement means the securing of 
freight room in a vessel. 

Engrossing the market. Buying stocks or commodities in 
large quantity in order to have command of the market. 

Entrepot. A distributing commercial centre, whether a sea- 
port or inland town, especially a port where goods are stored 
until re-exported or until duties are paid ; a depot or store- 
house. 

Equipment. The equipment of a railroad, as the term is 
commonly used, means its cars and locomotives. 

Equipment bond. A bond in an issue created by a railroad 
to acquire rolling stock and secured by a mortgage thereon. 

Equity. The equity in property is the difference between 
the value of property mortgaged or otherwise encumbered 
and the amount of the obligation (debt) to secure which the 
property is pledged. 

Thus, the equity in a loan is the difference between what the 
securities pledg'ed as collateral are worth and the amount bor- 
rowed on them. As a rule securities are accepted as collateral 
by lenders of money at about 80 per cent of their market value 
— that is, a lender will lend $80,000 on securities of the market 
value of $100,000 or will lend $100,000 on securities of the 
market value of $125,000. 

Equivalent. This word when applied to the price of a 
stock means a price that is equal to the price for the sam^ 
stock when it is quoted on a different basis. 

The price in London of an American stock is equivalent to 
the price in New York when the stock is selling in London at 
a price which, after allowing for the difference in the method 
of quoting, is equal to the price at which the stock is selb'ng in 
New York. 

In dealings in American stocks on the London Stock Ex- 
change 4 shillings is counted $1. Four shillings being equal 
to 97 1-3 cents the price of an American stock must be 2 2-3 
per cent (quotably 2 5-8 per cent) higher in London than in 



i82 SMITH'S FINANCIAL DICTIONARY. 

New York if the London price is to be equivalent to (or at a 
parity with) the New York price. Not 2 5-8 per cent of the 
face value is to be added arbitrarily to the New York price, but 
2 5-8 per cent of the New York price, whatever it may be, is to 
be added to the New York price to make an equivalent London 
price. 

Thus, for a stock selling at 50 in New York the equivalent 
price in London would be 51 3-8 (while the fraction 3-8 is not 
strictly correct it is quotably correct). For a stock selling at 
100 in New York the equivalent price in London would be 
102 5-8. Conversely, for a stock selling at 100 in London the 
equivalent price in New York would be 97 3-8 and for a stock 
selling at 50 in London the equivalent price in New York 
Avould be 48 5-8. 

In grain there is a normal difference in price between two 
markets equal to the cost of transporting the grain from the 
market where the lower price prevails to the market where 
the higher price prevails. When the difference is normal 
equivalent prices prevail. It is the same in cotton, etc. 

Estimated car lots. A grain trade term, meaning lots (num- 
ber of cars) expected at Chicago and other primary grain 
markets on the day following the estimate. 

Even. When a broker has bought and sold the same 
amount of the same stock he is even and has not to re- 
ceive or deliver that particular stock if it is on the list of stocks 
cleared at the New York Stock Exchange clearing house. If 
his transactions are not in stocks on the clearing house list, 
then he has to receive and deliver the stocks. If, however, he 
has bought from and sold to the same broker the same stock he 
can pair off" — neither receive nor deliver, but simply settle dif- 
ferences. 

On the London Stock Exchange the continuation rate on a 
security is even when no charge — backwardation or contango — 
is made for continuing bargains until the next settlement. See 
At even. 

Evening up. A stock market term, meaning the securing of 
profit to offset a previous loss. Thus, a speculator who sus- 
tained a loss in a stock of which he was short may turn about 
and go long of the stock and make up his loss ; or a speculator 



SMITH'S FINANCIAL DICTIONARY. 183 

who lost in one stock may make up his loss in another stock. 

Also, in abitrage operations in stocks (see Arbitrage) 
when a dealer buys more than he sells he subsequently sells 
enough additional to make up the difference, thus equalizing 
or evening up. 

Even lots. In stocks lots in multiples of 100 shares. 

Ex. Without or not including, as ex-dividend or ex-inter- 
est. 

Ex-all. London Stock Exchange term, signifying that a 
stock is selling ex-dividend and rights or ex any two or more 
privileges simultaneously offered to the shareholders (stock- 
holders) of a company, such as the right to subscribe for new 
stock of the company or for new stock of a controlled com- 
pany or for new' stock of two or more controlled companies. 
When a stock is sold "ex" it means that the buyer has no claim 
upon the dividend or rights or bonus, or any other 'advantage 
recently declared or due. Ex is the opposite of cum. 

Exchange. The payment of an obligation in one place by 
the transfer of a credit from another place. By this operation 
the obligation is discharged without the direct forwarding of 
money. 

Exchange, in itself, is an order obtained in one place for the 
payment of money in another place. Exchange is divided into 
domestic exchange and foreign exchange, but the same prin- 
ciples obtain in both. 

In the United States the term exchange (whether referring 
to foreign exchange or domestic exchange, but specifically in 
referring to foreign exchange) is used, whereas in Great Brit- 
ian the custom is to use the term in the plural, viz : the ex- 
changes. The term is, of course, derived from the exchanges 
of moneys and credits. It is the common practise in the United 
States to say exchange when bills of exchange are meant ; and 
likewise the term exchange is generally construed as meaning 
foreign exchange. 

There is practically no difference between a bill of exchange 
and a draft. The term bill of exchange, however, is commonly 
applied to an order for money payable in a foreign country,, 
whereas the term draft is applied to an order payable within 
the country of its origin. 



i84 SMITH'S FINANCIAL DICTIONARY. 

For additional information see Domestic exchange ; also see 
Foreign exchange. 

The term exchange also means a place where purchases and 
sales are made, as stock exchange. 

Exchange broker. One who acts for others in selling and 
buying, more particularly selling, exchange. The usual com- 
mission charged by a broker is i-8 per cent for selling domestic 
exchange and $i per £i,ooo (roundly $5,000) for selling for- 
eign exchange. 

Exchange loan. See Foreign exchange loan. 

There is practically no such thing as a loan of domestic ex- 
change. When a loan is obtained from a bank it ordinarily de- 
livers to the borrower a check on itself made out by its cashier 
(it is called a cashier's check) which the borrower may use in 
the place where issued or may transmit to any other place. 
The bank will, if desired, furnish to the borrower a draft 
on a bank in some other place, but this draft lacks many 
of the characteristics of a bill of exchange. The borrower 
merely borrows (obtains a loan) and it is a matter of ar- 
rangement with the bank as to the form in which he shall re- 
ceive the amount which he borrows. 

Exchange operation. A transaction in domestic or foreign 
exchange. 

The term exchange operation is also a London Stock Ex- 
change designation for a hedge on an option or privilege, as 
selling a call against a put bought or buying a put against a 
call sold. The purpose is protection against loss. 

Exchange quotations. Same as exchange rates ; see Ex- 
change rates. 

Exchange rates. The basis of all exchange rates is the rate 
for sight exchange (that is, a bill or draft which is payable at 
sight, which means on demand or presentation). 

The rate for a time bill or long bill (one payable at a spec- 
ified future date) is the rate for a sight bill, less interest on 
the amount of the bill from the date of its issuance to the date 
of its payment. This allowance for interest is made because 
the seller of the bill has the use of the money paid by the buyer 
for it until its payment. Interest is figured at the rate prevail- 
ing where the bill is payable for the reason that the bill is 



SMITH'S FINANCIAL DICTIONARY. 185 

domiciled or domiciliated there, which is another way of say- 
mg that the place of its payment is the place of its legal ex- 
istence, or rather will be after its acceptance, and the presump- 
tion is that it will be promptly accepted by the one upon whom 
it is drawn on its presentation to him. 

Rates for domestic exchange issued in New York are not 
published. To ascertain the rates it is necessary to make in- 
quiry of banks ; the business is almost entirely in the hands of 
banks. At other points the rates on New York and also on 
a few important points like Boston, Chicago, San Francisco, 
Philadelphia and St. Louis are published. When quoted in 
cents (or dollars) it is meant that the rate is so much premium 
or discount, as may be specified, on each $1,000. In some in- 
stances the rate is in percentages — so much per cent premium 
or discount. 

For information as to rates for foreign exchange see Foreign 
exchange rates. 

Exchanges. The exchanges at a clearing house are the items 
(checks, drafts, etc.,) which are presented by creditor banks 
(banks which hold them for collection) and are received by 
debtor banks (banks which are to pay them). In the opera- 
tion of making exchanges each bank piresents the items which 
it holds against all other banks and receives in return the items 
which all other banks hold against it. 

For additional information see Clearing house of the associ- 
ated banks of New York. 

Exchanges, The. In the United States the term exchange 
(whether referring to foreign exchange or domestic exchange, 
but specifiically in referring to foreign exchange) is used, 
whereas the practise in Great Britain is to use the term in the 
plural, viz : the exchanges. The term is, of course, derived 
from exchanges of moneys and credits. It is the common prac- 
tise in the United States to say exchange when bills of ex- 
change are meant; and likewise the term exchange is generally 
construed as meaning foreign exchange. 

Exchequer. The treasury of a state ; also, colloquially, the 
finances or pecuniary resources of a person, firm or corpor- 
ation. 

Exchequer bill. An interest bearing promissory note for- 



i86 SMITH'S FINANCIAL DICTIONARY. 

merely issued by authority of the British Parliament. It could 
be used in payment of taxes at its face value. No ex- 
chequer bills are now in existence. 

Exchequer bond. A security issued by the British govern- 
ment representing a part of the unfunded debt ; it is of a more 
permanent character than a Treasury bill inasmuch as it runs 
for a longer period. Principal and interest are paid out of the 
consolidated fund. 

Ex-coupon. A bond is sold ex-coupon when the coupon for 
the current interest payment is detached. 

Ex-dividend. Without or not including dividend. On and 
after the day the transfer books of a corporation close for the 
payment of a dividend the stock sells ex-dividend ; that is, the 
stock does not carry with it to the buyer the dividend that has 
been declared on it. 

Ex-drawing. English term ; a bond sold ex-drawing does not 
include to the buyer any advantage that the bond may derive 
if drawn for redemption. 

Executive committee. The executive committee of a board 
of directors has power to act in all matters except such as are 
(by the company's charter, articles of incorporation or by-laws 
or by the statutes) restricted to the board of directors as a 
whole. 

Ex-elevator. A grain trade term, meaning out of elevator : 
similar to ex-store ; see Ex-store. 

Exemplary damages. Same as punitive damages ; an amount 
allowed as punishment for a malicious or aggravated injury. 

Exhaust price. The point at which the margin in a specula- 
tive transaction is exhausted and at which the broker will close 
the transaction if the margin is not replenished. 

Ex-interest. Without interest or not including interest. 

Registered bonds sell ex-interest the same as stocks sell ex- 
dividend when the books are closed (see Books closed). If 
a registered bond, say a 4 per cent bond with the interest pay- 
able semi-annually, is selling at 98 while a coupon bond of the 
same issue is selling at 100 it is because interest goes with 
the coupon bond while it does not go with the registered bond. 

Ex-lake. A terrri applied to grain or any freight that has 



SMITH'S FINANCIAL DICTIONARY. i8r 

been transported part of the way by lake and the remainder of 
the distance by canal or railroad. 

Ex-new. London Stock Exchange term, signifying that a 
stock is selling without the right to participate in an allotment 
of new stock. 

Export bar. A name given to a bar or ingot of fine (pure) 
gold containing $8,000 worth of the metal. The name is de- 
rived from the fact that bars of this size are customarily used 
in export shipments of gold when the shipments are in bars 
instead of coin. 

Also see Jeweler's bar. 

Exporter's credit. Exporter's credit is given when an ex- 
porter is allowed to draw on a dealer in foreign exchange in 
advance of an actual shipment abroad by him ; when he makes 
his shipment he discharges his obligation by delivering the 
draft drawn against the consignee of the property shipped, to- 
gether with the bill of lading, to the dealer in exchange to 
whom he is indebted. 

Exporting countries. Grain producing countries which grow 
more grain than they consume and sell the surplus to foreign 
countries. Argentina, Australia, Hungary, India, Roumania, 
Russia and the United States are the leading exporting coun- 
tries. 

Exports. Goods or any articles of trade or commerce sent 
out of a country to another country. 

Export trade. Goods or any articles of commerce sold and 
shipped to other countries ; another name is outward trade. 

Express company money order. A bill of exchange (draft) 
sold by an express company. It is forwarded by mail to the 
payee (the one to whom the amount of it is .to be paid) the 
same as a bill sold by a bank or banker. 

Express contract. One in which the terms and stipulations 
of the agreement are specifically set forth. 

Express damages. A legal term ; actual or real damages. 

Ex-rights. A stock that is sold ex-rights does not convey to 
the buyer the privilege to participate in any right (as the right 
to subscribe for new stock or for new stock of a' subsidiary 
concern) that may recently have been granted to holders. 

Ex-ship or ex-steam€r. A mercantile term ; goods sold ex- 



i88 SMITH'S FINANCIAL DICTIONARY. 

ship or ex-steamer are sold free out of the vessel (free of 
charges up to the time of discharge from the vessel). The 
seller's responsibility ceases as soon as the goods have left the 
vessel. Free overside has the same meaning. 

Sometimes the term ex is used in connection with the name 
of a vessel, as ex-steamer Ocean or ex-ship Wave. In such 
a case the name of the vessel is used for the purpose of desig- 
nating the particular vessel by which the goods arrived as 
well as to indicate that the goods are free out of the vessel. 

Ex-store. A commercial term, meaning out of store. In a 
transaction ex-store the buyer (of grain, for instance) must 
pay cartage, lighterage or other charges after leaving the 
storage warehouse or elevator. 

EXT. As printed on the tape by the stock ticker these 
letters mean extended or extension, as bonds extended beyond 
the date of their maturity or bonds issued under a mortgage on 
an extension of a railroad. 

Extended. When an obligation has been continued beyond 
the time originally set for the payment of it the obligation is 
said to have been extended. 

Extended bond. A bond extended after maturity for a fixed 
period at the same or perhaps at a different rate of interest. 

Extension. When an obligation has been continued beyond 
the time originally set for the payment of it an extension is 
said to have been granted. 

Extension bond. A bond issued under a mortgage covering 
an extension of a railroad ; it may or may not represent a first 
lien. 

External commerce or trade. Same as foreign commerce 
or trade ; the exports and imports of a country, that is, its 
commerce or trade (purchases and sales) with other countries. 

Extra dividend. A dividend in addition to the regular divi- 
dend. 

Extraordinary meeting. English term for a meeting of the 
shareholders (stockholders) of a company to act on some un- 
usual proposition, such as an increase of capital or reconstruc- 
tion (reorganization). 

Ex-warehouse. English term, meaning the same as ex- 
store ; see Ex-store. 



SMITH'S FINANCIAL DICTIONARY. 189 



Face value. The face value of stocks and bonds is the value 
printed on the face of them — the amount they are issued for 
or call for ; same as par value. For additional information see 
Par. 

Factor. An agent employed to sell goods consigned to him. 

The difference between a factor and a broker is that the fac- 
tor is entrusted with the property which he is to dispose of 
while the broker, in a strict sense, is only employed to make a 
bargain for the sale of property. The term factor is most com- 
monly used in the cotton trade. 

The word factor is often used in the sense of influence, force 
or element, as a factor in the situation or in the money market 
or stock market. 

Failure. Admission of inability to meet obligations ; assign- 
ment in bankruptcy. 

Falling averages. The weekly statement of the associated 
banks of New York gives the average deposits, loans, cash 
holdings, etc., of the banks for the week. When these items 
are declining in amount the bank statement is said to be made 
up on falling averages. The opposite of falling averages is 
rising averages. For additional information see Bank state- 
ment. 

Falling exchange. If foreign exchange is quoted in the 
money of the country where issued a falling rate for it signifies 
that the exchange situation is in favor of the country where 
the exchange is issued and against the country where it 
is payable. In other words, the exchange is less costly — the 
money of the country where the exchange is payable costs less 
in the money of the country where the exchange is issued. For 
instance, exchange on London is quoted in New York in 
dollars (and cents) and when the rate is falling the pound 
sterling is worth less in dollars (and cents). 

If foreign exchange is quoted in the money of the country 
where it is payable a falling rate for it signifies that the ex- 



190 SMITH'S FINANCIAL DICTIONARY. 

change situation is against the country where the exchange is 
issued and in favor of the country where it is payable. In other 
words, exchange is more costly — the money of the country 
where the exchange is issued brings less in the money of the 
country where the exchange is payable. For instance, ex- 
change on Paris is quoted in New York in francs and when the 
rate is falling less in francs (and centimes) can be obtained 
for the dollar. 

The opposite of falling exchange is rising exchange ; see 
Rising exchange. 

False certification. The term commonly used is overcertifi- 
cation ; see Overcertification. 

Fancy stock. A stock high in price; also one subject to 
extensive manipulation with wide changes in price. 

F. A. S. Free alongside ship ; see Free alongside ship. 

Fat loan. A colloquialism, meaning a loan for which an 
tmusual amount of collateral is provided. 

Favorable and unfavorable (foreign) exchange conditions. 

If foreign exchange is quoted in the money of the country 
where isstied a falling rate for it signifies that the exchange 
situation is favorable to (in favor of) the country where the 
exchange is issued and unfavorable to (against) the country 
where it is payable. In other words, the exchange is less 
costly — the money of the country where the exchange is pay- 
able costs less in the money of the country where the exchange 
is issued. For instance, exchange on London is quoted in New 
York in dollars (and cents) and when the rate is falling the 
pound sterling is worth less in dollars (and cents). 

If foreign exchange is quoted in the money of the country 
where it is payable a falling rate for it signifies that the ex- 
change situation is unfavorable to (against) the country where 
the exchange is issued and favorable to (in favor of) the 
country where it is payable. In other words, exchange is more 
costly — the money of the country where the exchange is is- 
sued brings less in the money of the country where the ex- 
change is payable. For instance, exchange on Paris is quoted 
in New York in francs and when the rate is falling less in 
francs (and centimes) can be obtained for the dollar. 

If foreign exchange is quoted in the money of the country 



SMITH'S FINANCIAL DICTIONARY. 191 

where issued a rising rate for it signifies that the exchange 
situation is unfavorable to (against) the country where the 
exchange is issued and favorable to (in favor of) the country 
where it is payable. In other words, exchange is more costly 
— the money of the country where the exchange is payable 
costs more in the money of the country where the exchange is 
issued. For instance, exchange on London is quoted in New 
York in dollars (and cents) and when the rate is rising the 
pound sterling costs more in dollars (and cents). 

If foreign exchange is quoted in the money of the country 
where it is payable a rising rate for it signifies that the ex- 
change situation is favorable to (in favor of) the country 
where the exchange is issued and unfavorable to (against) the 
country where it is payable. In other words, exchange is less 
costly — more in the money of the country where the exchange 
is payable is obtainable in the money of the country where the 
exchange is issued. For instance, exchange on Paris is quoted 
in New York in francs and when the rate is rising more in 
francs (and centimes) can be obtained for the dollar. 

FD. As printed on the tape by the stock ticker these let- 
ters mean funding, as funding (or refunding) bonds. 

Feeder. A name applied to a railroad (or other carrying 
line) from which another and usually more important railroad 
(or other carrying line) receives traffic (freight or passengers 
or both). Sometimes the name feeder is given to a branch 
line which was built or acquired to obtain additional traffic 
for the main line. 

Fiat money. " Fiat money is paper money issued by a gov- 
ernment against which neither gold nor silver is held in the 
treasury. It is money by fiat (decree) of the government. 
United States notes (greenbacks) were fiat money, but they 
are noAv redeemed in gold by the Treasury. 

Finance. The science of money and monetary affairs ; the 
systematic control and regulation of revenue and expenditure ; 
pecuniary management or methods. 

The term finance comprehends legislation (that is, financial 
and allied legislation), banking, securities, negotiation, promo- 
tion, organization, reorganization, adjustment and readjust- 



192 SMITH'S FINANCIAL DICTIONARY. 

nient. Finance involves and implies science and skill in one 
or several or all of these things. 

Finance bill. A bill of exchange (draft) drawn in connection 
with a financial operation, as an issue of stock or bonds ; or a 
reorganization or readjustment; or an underwriting. 

The term is often applied to a bill issued as a loan. For ex- 
ample, a person in New York borrows £50,000 in sterling in 
London. The lender in London sends to the borrower in New 
York a letter formally authorizing the borrower to draw on the 
lender for the amount named. The stipulation is (usually) 
made that collateral for the loan (usually stocks or bonds) 
shall be attached to (shall accompany) the draft. The stipu- 
lation may be that the collateral shall be deposited in trust in 
New York, in which case only a memorandum of the collateral 
is attached to the bill. By leaving the collateral in New 
York substitution or change in the collateral can be more 
readily made than if the collateral is sent to London. Substi- 
tution can, of course, only be made by consent of the lender in 
London. The loan might be obtained in Paris, in which case 
it would be in francs; or it might be obtained in Berlin, in 
which case it would be in reichsmarks (marks). The bill of 
exchange is sold by the borrower the same as any other bill 
of exchange to obtain the money represented by it. 

Finance committee. The finance committee of a stock com- 
pany is the committee of the board of directors which espe- 
cially has the handling and direction of its monetary afifairs. 

Finance company. In Great Britain a finance company is 
one whose main business is investing and dealing in the stocks 
and bonds of other companies. 

Financed. Placed in satisfactory financial or monetary cir- 
cumstances. 

An enterprise or a business has been financed when its finan- 
cial requirements have been met. Specifically, a stock com- 
pany has been financed when placed in a satisfactory financial 
condition, as when its stock or its stock and bonds have been 
sold or underwritten and it has been supplied with working 
capital. 

In financial usage preference is given to the word financed 
over the word financiered. 



SMITH'S FINANCIAL DICTIONARY. 193 

Financial. Of or pertaining to finance or revenue ; mone- 
tary. 

Financial article. The article in a newspaper which de- 
scribes operations and conditions in the financial markets, in- 
cluding the market for stocks and bonds ; another name is 
money article. 

It is the custom of newspapers to print the report of the 
transactions in stocks on the New York Stock Exchange in 
tabular form. First is given the number of shares of each 
stock sold and then in order the high, low and last prices and 
then the net change, which is represented by the difference be- 
tween the last price of the day in question and the last price the 
day before (or if there was no transaction the day before, then 
the price at which the last preceding transaction, whenever it 
took place, was made). A net advance (or gain) is usually in- 
dicated by the plus mark, viz : + and a net decline (or loss) 
by the minus mark, viz : — . Usually only bid and asked quo- 
tations for "outside" stocks are printed. 

It is the custom of the newspapers to print in detail the 
transactions in bonds on the New York Stock Exchange. 
They print the transactions in the order in which they are 
made. UsuallyTn reporting a bond transaction first is given 
the amount of it in dollars (the dollar mark, $, being omitted) 
at the par (face) value of the bond (not the number of bonds 
sold, because bonds are for varying amounts up to $10,000 
each) ; then follow the name of the bond and next and last 
the price by percentage (the same as in reporting sales of 
stocks). 

Financial condition. The condition or state of the finances 
of a company. 

Financial editor. The writer of the article in a newspaper 
which describes conditions and operations in the financial mar- 
kets, including the market for stocks and bonds. The London 
title for financial editor is City editor; see City. 

Financialist. Seldom used ; same as financier ; see Finan- 
cier. 

Financial statement. Same as balance sheet; see Balance 
sheet. 

Financial year. In Great Britain the term financial year is 



194 SMITH'S FINANCIAL DICTIONARY. 

generally used instead of the term fiscal year. The financial 
year of the government of Great Britain begins April i. 

Financier. One skilled in or occupied with financial affairs 
or operations. 

A financier is one who is adept in the use of money ; in devis- 
ing and carrying out plans or schemes involving the employ- 
ment of money ; in effecting the issuance and disposition of se- 
curities ; in organizing corporations or enterprises ; in read- 
justing or reorganizing the pecuniary affairs of concerns; and 
also in framing monetary or kindred legislation. 

Financiered. Same as financed : see Financed. 

Financiering. Same as financing; see Financing. 

Financing. Financing an enterprise or a business consists in 
supplying its financial requirements. Specifically, financing a 
stock company consists in placing it in a satisfactory financial 
condition as selling its stock or its stock and bonds or procur- 
ing the underwriting of them and providing the company with 
working capital. 

In financial usage preference is given to the word financing 
over the word financiering. 

Fine bill. English term for a bank bill of the best quality. 

Fine gold. Pure gold. The value of an ounce of fine gold in 
the United States is $20.67.2 ; in Great Britain the value is £4, 
4 shillings 11.45 pence. 

Fineness. In reference to gold and silver fineness means the 
proportion of pure metal and it usually is expressed in thou- 
sandths. The coins of the United States, both gold and silver, 
are .900 fine, that is, nine-tenths pure metal and one-tenth alloy. 
The alloy in a gold coin is one part silver and nine parts cop- 
per ; in a silver coin the alloy is copper. The gold coins of 
Great Britain are .916 2-3 fine, while the silver coins are .925 
fine. 

Fine paper. First class paper (promissory note or bill of ex- 
change or draft). 

Finer rate. A lower rate ; said of the rate of discount. 

Fine silver. Pure silver. 

Firm. A partnership. 

Also, firm as used in a transaction means fixed. A firm price 



SMITH'S FINANCIAL DICTIONARY. 195 

is a fixed price ; a firm bid is a bid that will be adhered to (us- 
ually for a specified or understood period). 

Subscribers to underwriting syndicates usually receive a 
commission ; when the subscriptions are firm the subscribers 
receive no commission but pay the agreed price for the securi- 
ties subscribed for. 

First board. On exchanges where there are calls of stocks 
and bonds or calls of grain, cotton, etc., the first call is often 
designated as the first board. 

Also, the first printed list of sales on the New York Stock 
Exchange, covering the period from 10 a. m. to 12 noon, is 
called the first board. 

First class. A designation meaning without a superior ; prin- 
cipally used in commercial affairs. 

First class paper. A promissory note made or indorsed or 
a bill of exchange (draft) drawn or indorsed by a party in high 
financial standing. 

First hands. The original hands. To buy at first hands is 
to buy from the manufacturer or producer (or from the agent 
of the manufacturer or producer) or from the importer instead 
of from an intermediary, as a middleman or jobber. 

First mortgage. The mortgage which is a lien ahead of all 
other liens (except in some instances a prior lien, which usu- 
ally represents only a small part of the value of the property). 

First mortgage bond. A bond issued under a first mortgage. 

First, second and third of exchange. It is the practise of 
bankers who are sellers of foreign exchange to draw their bills 
(bills of exchange or drafts) in sets, so-called — sometimes in 
duplicate and sometimes in triplicate. 

The entire set is delivered by the seller to the buyer of ex- 
change. The first of exchange (the original bill) is forwarded 
to the payee (the one to whom the amount of the bill is to be 
paid) by one steamer, while the second of exchange (a copy of 
the bill) is sent by another steamer for use in case the original 
bill is lost or materially delayed in transit. If a third of ex- 
change (another copy) is made out it is sent to the payee by 
a still different steamer or it may be retained by the buyer of 
the exchange as a voucher. The payment of any one of the 
bills extinguishes the set, or in other words, cancels the others. 



196 SMITH'S FINANCIAL DICTIONARY. 

First teller. The paying teller in a bank. 

Fiscal. Financial. 

Fiscal Bank of the United States. This was the name given 
to a proposed bank modelled practically on the same lines as 
the two Banks of the United States. It seems to have been 
the idea of its projectors that the word Fiscal in the title would 
overcome some of the popular objections to the establishment 
of a third great national bank. 

Congress passed a bill authorizing the Fiscal Bank of the 
United States and sent it to President Tyler on August 6, 
1841. The President vetoed it on alleged constitutional 
grounds. A new bill meeting the views of the President as 
expressed in his veto was promptly prepared and passed, but 
the President vetoed that also. This ended all serious at- 
tempts to create a great national bank. 

Fiscal year. The twelve months counted as a year in finan- 
cial operations. The fiscal year of the United States govern- 
ment and of a majority of corporations ends on June 30. 

Fishing excursion. Said in legal proceedings (particularly 
where financial matters are involved) when questions are 
asked for the purpose of obtaining information upon which to 
base additional or other proceedings. 

Five ports. When this term is used with reference to- export 
trade it means the four ports (the four important Atlantic 
ports — Boston, New York, Philadelphia and Baltimore) and 
New Orleans (which is a gulf port — a port on the Gulf of 
Mexico). 

Fixed bill. A bill of exchange (draft) or promissory note 
without days of grace. 

Fixed capital. Property that has reached its final form and 
that may be used many times in production, as machinery or 
lands. • 

Fixed charge. A charge that becomes due at stated inter- 
vals. 

In the case of a railroad fixed charges include interest on 
funded debt, interest on floating debt, rentals, taxes and re- 
quirements of sinking funds. Failure to pay these charges 
constitutes a legal default. 



SMITH'S FINANCIAL DICTIONARY. 197 

Fixed debt. A permanent debt, or at least a debt continuing 
for an extended period, as a debt represented by bonds. 

Fixed exchange. If foreign exchange is quoted in the 
money of the country where issued, but is payable in the 
money of the country where collection is to be made, it is 
called fixed exchange. For instance, exchange on London is 
quoted in dollars in New York and is, therefore, fixed ex- 
change. The pound sterling is the basis and the amount in 
dollars (and cen£s) fluctuates instead of the pound sterling. 

The opposite of fixed exchange is movable exchange; see 
Movable exchange. 

Fixed indebtedness. A permanent indebtedness, or at least 
an indebtedness continuing for an extended period, as an in- 
debtedness represented by bonds. 

Fixed liabilities. Same as fixed indebtedness ; see Fixed in- 
debtedness. 

Also, the term applies to liabilities that have been deter- 
mined, as actual liabilities, in distinction from contingent lia- 
bilities. 

Fixed liability. A liability or responsibility which has been 
determined and is not in question or dispute. 

Fixture. London money market term for a loan for a fixed 
period, as opposed to day-to-day money, which is repayable 
at call (on demand). 

Flat. Without interest. 

When bonds are sold flat no additional charge is made to 
the buyer for the interest accrued on them ; in other words, the 
interest is included in the sale. 

When stocks lend flat the lender has not to pay inter- 
est to the borrower of the stock. Ordinarily the borrower of 
stock pays the lender the market value of the stock and the len- 
der pays interest to the borrower on this money. 
- The rate of interest paid is usually a little less than the rul- 
ing rate for call money. When a stock is lending flat the fact 
signifies that this particular stock is in inadequate supply, or 
at least that it is not easy to obtain by borrowers. 

When a stock is lending at a premium the borrower not 
only receives no interest on the money that he advances to the 
lender, but he also has to pay whatever amount may be agreed 



J98 SMITH'S FINANCIAL DICTIONARY. 

upon for the use of the stock. In such a case the stock is very 
scarce or very difficult to obtain. 

There is another meaning to flat ; when little business is 
done in the stock market or in any other market the market 
is said to be flat. 

On the London Stock Exchange the word flat is used, 
though rarely, to indicate that the quotation for a stock (bond") 
does not include accrued interest. Transactions of this kind 
are seldom carried out in London. 

Flexible currency. Another name for elastic currency; see 
Elastic currency. 

Floater. English name for a security of the better class 
payable to bearer ; the name is applied because of the facility 
with which such a security may be used as cover (collateral) 
for loans. 

Floating a stock or floating bonds. Same as placing a stock 
or placing bonds ; marketing ; selling. The term is generally 
applied to the disposal of an entire issue of stock or bonds, or 
at least a large part of an issue. 

Floating capital. Capital not represented by a permanent 
investment ; in other words, capital invested in things pro- 
duced, whether raw material, articles in process of completion 
or articles completed, and in pay for labor and services, as 
wages and salaries. 

Floating debt. Unfunded indebtedness ; indebtedness not 
represented by securities. Specifically, floating debt consists 
of (i) money directly borrowed; (2) money owed for miscel- 
laneous purposes ; (3) money payable in a short time. 

Floating debt is the English name for the British govern- 
ment's temporary liabilities in the form of Treasury bills, etc., 
as distinguished from the funded debt; see Funded debt. 

Floating money. Money in the market not engaged and 
available for loans, etc. 

. Floating stock. Stock not held permanently; the propor- 
tion of the capital stock of a company available for specula- 
tive purposes. 

Floor. A name given to the board room (trading room) of 
an exchange ; on the floor means in the board room. 

Floor rights. The rights of brokers on the floor (in the 



SMITH'S FINANCIAL DICTIONARY. 199 

board room) of an exchange as defined by the by-laws of the 
exchange. For additional information see Floor rules. 

Floor rules. ' In dealings on the New York Stock Exchange 
bids and offers made and accepted in accordance with these 
rules are binding: 

All offers to buy or sell securities shall be for 100 shares of 
stock or for $10,000, par value, of bonds unless otherwise 
stated. Offers to buy or sell specific amounts other than as 
above stated may be made at the same time and may be in- 
dependently accepted. 

Bids and offers may be made only as follows : 

Cash (for delivery on the day of contract) ; regular way 
(for delivery on the business day following the contract) ; at 
three days (for delivery on the third day following the con- 
tract) ; buyer's or seller's option for not less than 4 days nor 
more than 60 days. 

Bids and offers under each of these specifications may be 
made simultaneously as being essentially different proposi- 
tions and may be separately accepted without precedence of 
one over the other. 

Bids and oft'ers without stated conditions are considered to 
be in the regular way. 

In offers to buy on seller's option or to sell on buyer's 
option the longest option has precedence. In offers to buy on 
buyer's option or to sell on seller's option the shortest option 
has precedence. 

Floor trader. Same as room trader, which name is more 
commonly used ; see Room trader. 

Flotation. The flotation of a scheme is the financing (see 
Financing) of it; the flotation of an issue (or block — large 
amount) of stock or bonds is the marketing (selling) of it. 

FLT. As printed on the tape by the stock ticker these let- 
ters mean flat (without interest) ; see Flat. 

Fluctuation. An upward and downward movement in price. 

The smallest fluctuation (quotable change in price) per- 
mitted on the NcAv York Stock Exchange is 1-8 of i per cent, 
which is equal to $12.50 on 100 shares of stock of the par (face) 
value of $100 each or on $10,000 of bonds. 

The smallest fluctuations in commodities are : Grain 1-8 of 



200 SMITH'S FINANCIAL DICTIONARY. 

I cent a bushel, equal to $6.25 on 5,000 bushels (sometimes 
there is a "split" quotation of 1-16 of i cent) ; lard, i cent per 
100 pounds, equal to $8.50 on 250 tierces (85,000 pounds) ; 
pork, 2 1-2 cents per barrel, equal to $6.25 on 250 barrels; 
short ribs, 2 1-2 cents per 1,000 pounds, equal to $12.50 on 
50,000 pounds ; cotton, i point (one-hundredth of a cent) per 
pound, equal to $5 on 100 bales (50,000 pounds) ; cofifee, 5 
points per pound, equal to $16.25 on 250 bags (32,500 pounds) ; 
silver bullion, 1-8 of i cent per ounce, equal to $1.25 on 1,000 
ounces. 

Flurry. A speculative term, meaning a sudden commotion 
in prices of securities or commodities or in the rates for money. 

Flyer. A term applied to a chance venture (speculation) in 
stocks or commodities. 

F. O. B. The letters which stand for free on board; see 
Free on board. 

Folio. In bookkeeping a folio is two pages facing each 
other, both of which bear the same number. 

For account of whom it may concern. Said of a sale the 
proceeds of which are to go to the one on whose behalf or for 
whose benefit it is made. The term is commonly used in auc- 
tion sales when the name of the seller is withheld. 

Forbearance. Term employed when a creditor waits be- 
yond the date of its maturity for the payment of a debt. 

For cash. When stocks or commodities are sold cash (for 
cash) the contract must be fulfilled on the day on which it is 
made. Unless otherwise agreed stocks must be delivered and 
received before or at 2:15 o'clock; on Saturdays before or at 
II 130 o'clock. 

On the London Stock Exchange the usual term is "for 
money." It means that delivery and receipt of the securities 
and payment for them is to be made at once instead of waiting 
for account day. Also see For the account. 

There is another meaning to "for cash" as the term is used 
in Wall Street. When a broker's customer buys or sells for 
cash he pays in full for the stocks bought or receives pay in 
full for the stocks sold. Stocks cannnot, of course, be sold 
short for cash. 

Forced currency. Depreciated paper or silver currency 



SMITH'S FINANCIAL DICTIONARY. 201 

(money) made legal tender by law — the currency is forced into 
circulation. Where forced currency circulates gold money is 
at a premium. 

Forced loan. A forced loan originates more frequently in 
an overdraft than in any other way. Illustration : A depositor 
in a bank draws a check for a sum larger than the balance or 
amount standing to his credit in the bank. The bank pays 
the check in the expectation that the depositor will on notifi- 
cation that he has overdrawn his account make good the dis- 
crepancy or, as it is commonly called, overdraft. He is not 
able to do so and the bank is forced to make a loan to him of 
the amount of the shortage in order to cover the overdraft — 
that is, in order to bring his credit up to a sum that equals the 
amount of the check. 

When a call loan is called (payment demanded) and not 
paid or when a time loan (a loan for a specified period) has 
matured and demand for its payment is not complied with 
and the loan is continued for a further period by the lender it 
is called a forced loan. In such a case the loan is continued 
because of the temporary inability of the borrower to repay it 
or because the state of the market is unfavorable for the sale 
of the collateral which secures the payment of the loan. 

The Bank of Venice, the forerunner of the modern bank, 
had its origin in 1171 in a forced loan which had been adopted 
as a means of relieving the financial necessities of the Republic 
of Venice. The wealthy citizens were required to contribute 
to a loan. Instead of the delivery of bonds to the citizens as 
certificates of the indebtedness of the republic to them the 
amounts in specie which were received from them were placed 
to their credit in a book or ledger. The republic paid punc- 
tually 4 per cent interest to the citizens who had been levied 
upon, but did not repay the principal (the original amounts 
exacted from the citizens). In transactions among themselves 
the citicens fell into the practise of transferring to each other 
portions of the indebtedness of the republic to them, or in 
other words, portions of their credits with the republic. This 
method of transacting business was found so convenient and 
superior to handling the coined money that the republic estab- 
lished the Bank of Venice in order that the citizens generally 



202 SMITH'S FINANCIAL DICTIONARY. 

might deposit their specie and obtain therefor bank credits. 

Forced quotations. Quotations created by fictitious deal- 
ings ; wash transactions. For additional information see 
Washing. 

Foreclosure. Seizure of mortgaged property on default in 
payment of interest. 

Foreign bill. In Great Britain this term means a bill of 
exchange on a foreign country. In the United States the 
single word exchange is generally construed as meaning a 
foreign bill, although the term foreign exchange is a more 
definite term. 

Foreign commerce or trade. Export and import trade; the 
commercial interchange of commodities by one country with 
other countries. 

Foreign credit balance. The balance in favor of a country, 
as, for instance, the United States, and against the rest of the 
world. 

Foreign debit balance. The balance against a country, as^ 
for instance, the United States, and in favor of the rest of the 
world. 

Foreigner. London Stock Exchange term ; a security is- 
sued by a foreign government. 

Foreign exchange. The payment of an obligation in a place 
in one country by the transfer of a credit from a place in 
another country by means of a bill of exchange (a draft or 
order for money) , as a bill drawn in New York and payable in 
London. 

Illustration : A in London owes $100,000 (or the equiva- 
lent in pounds sterling) to B in New York ; likewise, C in New 
York owes $100,000, or the equivalent of that sum, to D in 
London. A in London buys a bill of exchange on New York 
(collectable in New York) for the amount of his obligation 
and forwards it to B in New York ; likewise, C in New York 
buys a bill of exchange on London (collectable in London) for 
the amount of his obligation and forwards it to D in London. 
Thus, both A and C have paid what they owed, while B and D 
have received what was due them, and no money has crossed 
the ocean in settling the accounts. 

A merchant in New York usually pays for goods bought in 



SMITH'S FINANCIAL DICTIONARY. 203 

London or Paris with a bill of exchange or draft purchased 
from a bank or banker in New York which is payable by the 
correspondent (bank or banker) in London or Paris, as the 
case may be, of the New York bank or banker. The bill of 
exchange saves much trouble and expense to the remitter (the 
merchant). It is payable in English or French money, as the 
case may be, and is purchased at the equivalent in United 
States money. The foregoing is an instance where exchange 
is bought. 

Following is an instance where exchange is sold : A in 
New York makes a shipment of goods to B in London for 
which immediate payment is to be made. A makes out a draft 
on B for the amount (that is, the amount in money) due him 
and attaching to the draft the bill of lading for the goods sells 
the draft to a dealer in foreign exchange in New York, who 
forwards it to his correspondent in London for collection from 
B. Thus, A receives pay for his goods as soon as they are 
shipped — he has not to ship the goods, wait for them to reach 
London, and then wait for a ship to bring back gold in pay- 
ment for them, nor even to wait for the mail to bring back a 
draft bought by B in London on some bank or banker in New 
York ; much less has he to wait for B to receive the goods, 
draw a check on his own (B's) bank in London, and send it to 
him (A in New York), who would have to sell the check to 
some dealer in foreign exchange in New York. B, on the 
other hand, by receiving the bill of lading for the goods when 
the draft is presented to him for payment knows not only that 
the goods have been shipped to him by A, but by possessiori 
of the bill of lading holds actual title to them. 

A draft (such as A draws on B in the foregoing example) ac- 
companied by a bill of lading and other papers (policy of in- 
surance, etc.) is termed a documentary bill for payment. In 
case payment is not to be made immediately (as by the pay- 
ment of a draft at sight — a draft payable on demand or pres- 
entation), but at some future time, although delivery of the 
goods is to be made on their arrival in London, the party 
drawn upon (who is to pay the bill at maturity) accepts the 
draft (writes on its face his acceptance — his acknowledgment 
of the obligation and a promise to pay it Avhen due) and the bill 



204 SMITH'S FINANCIAL DltTIONARY. 

of lading is surrendered to him, the possession of the bill of 
lading enabling him to obtain possession of the goods. A 
draft to be accepted for payment at a future time accompanied 
by a bill of lading and other papers is termed a documentary 
bill for acceptance. 

Bills payable on demand or sight (that is, on presenta- 
tion) are called sight bills; bills payable in lo to 30 days are 
called short bills ; bills payable in 60 days or in a longer period 
-are called long bills. There are also cable transfers by which 
money (or credit) is transferred by cable. These, for brevity, 
are called cables. 

Bills drawn by banks or bankers against their credits 
abroad are called bankers' bills. These include letters of 
credit. Bills drawn against shipments of commodities or 
manufactures are called commercial bills. Specifically, grain 
bills are drawn against grain shipped and cotton bills are 
drawn against cotton shipped. 

Dealers in foreign exchange do not ordinarily resell the 
commercial and other bills which they buy. These they for- 
ward for collection or in cover (in payment) of their own bills. 
The bills they sell are their own bills which are drawn against 
credits they themselves have negotiated abroad or against 
credits that they have created by forwarding the commercial 
and other bills they have purchased. 

A banker's bill of foreign exchange is drawn (and delivered 
to the buyer) in sets, so-called — in duplicate or triplicate and 
numbered first and second, or first, second and third of ex- 
change, respectively, requesting payment of money as men- 
tioned in each. The one first presented is paid and the payment 
of this one extinguishes (cancels) the others. Where a bill 
is issued in duplicate the two copies are forwarded for collec- 
tion, each by a different steamer (to provide against the loss 
or delay of one). If a third copy is furnished it is retained by 
the purchaser of the bill as a voucher or it may be forwarded 
b)y a third steamer. A bill of exchange is transferable by 
indorsement the same as a check. 

Following is the usual form of a 60-day bill of exchange 
drawn in triplicate : 



SMITH'S FINANCIAL DICTIONARY. 203 

Exchange for £1,000. New York, January i, 1904. 

At sixty days after date of this our First of Exchange (second and 
third of the same tenor and date unpaid) pay to the order of James 
Robinson One thousand Pounds sterling, and charge the same, without 
further advice, to 

No. 5,005. Brown, Green & Co. 

To White, Black & Co., . • 

London. 

When America is largely indebted to Europe drafts (bills 
of exchange) drawn in America on Europe, that is, payable in 
Europe, are likely to command a premium, or in other words, 
are likely to be worth more than their face value (or the equiv- 
alent of their face value). On the other hand, when Europe 
is largely indebted to America drafts drawn in America on 
Europe are likely to be at a discount, or in other words, are 
likely to be quoted at less than their face value (or the equiva- 
lent of their face value). 

Bills on Great Britain are payable in pounds sterling, on 
France in francs, on Germany in marks, on Holland in guilders, 
etc. Bills payable in pounds sterling are called sterling bills. 

Conditions of exchange are greatly involved when between 
a country having a gold standard, where the value of money is 
fixed, and a country having a silver standard or using a depre- 
ciated paper currency, where the value of money is fluctuating. 
They are even more involved when between two countries both 
of which have currencies of fluctuating value. 

If A in New York desires to pay B in London £100,000 the 
exact amount in United States money which will equal this 
sum is $486,656. The remittance of this amount in United 
States gold coin would not ordinarily cancel the obligation 
for the reason that the coin accumulated for the purpose would 
be short in weight owing to abrasion or wear in use. It 
would, therefore, be necessary to add coin to make up the defi- 
ciency in weight. If, however, the United States Treasury is 
selling assay ofhce bars at par (it generally charges a commis- 
sion of 1-8 of I per cent) $486,656 may be deposited in the 
Treasury and bullion obtained worth an equal amount in 
London, that is, worth £100,000 in London. 

Should A be able to obtain British sovereigns 100,000 of 
them, if only normally abraded or worn (that is, not abraded 



206 



SMITH'S FINANCIAL DICTIONARY. 



or worn to such an extent as to prevent their acceptance in 
London at their face value), will discharge the obligation. In 
this case the deficiency in weight has not to be made up ; in- 
deed, if the sovereigns can be bought by weight there will be 
a profit in their purchase. 

The following table shows the equivalent values of the 
moneys of countries in which and with which exchange deal- 
ings are large : 



Dollar (United States) 

£i, or 20 shillings (Great Britain) 

Franc (France) 

Reichsmark (Germany) 

Guilder (Netherlands — Holland) . 



4.86.6 

•19.3 
.23.8 
.40.2 



4.1 1 

•79 

.98 

1.65 



S.18 
25.22 



1.24 
2.08 



4.20 


2.49 


0.43 


12.10 


.81 


48 




.59 



1.69 



The official name of the reichsmark is mark ; reichsmark 
means imperial mark or the mark according to the govern- 
ment standard; the addition of reichs is superfluous, but it is, 
nevertheless, retained in exchange dealings and in other inter- 
national financial transactions. 

The official name of the guilder is florin ; guilder is the old 
name, but it is, nevertheless, retained in exchange dealings 
and in other international transactions. 

For the' equivalents of all foreign moneys in United States 
money and also in the money of Great Britain see Moneys of 
the world. 

When a bill of exchange is quoted in the money of the 
country where it is issued, but is payable (is to be paid) 
in the money of the country upon which it is drawn (where 
it is payable), the higher the quotation (or rate) the higher 
is the cost of such exchange for the reason that a high rate 
requires more of the money of the country where the bill is 
purchased to buy a given amount of the money of the country 
where the bill is payable than a low rate requires. 

On the other hand, when a bill of exchange is quoted in the 
money of the country upon which it is drawn (which is also 
the money in which it is to be paid), as francs, the higher the 



SMITH'S FINANCIAL DICTIONARY. 207 

quotation the less is the cost of such exchange for the reason 
that more in the foreign country's money can be purchased for 
$1 at a higli rate than can be purchased at a low rate. 

Illustration: If exchange for £1 is purchased for $4.89 it 
-costs more than if purchased at $4.84. On the other hand, if 
exchange for 5.25 francs (5 francs 25 centimes) is purchased 
for $1 it costs less than if exchange for 5. 11 francs is purchased 
for $1 ; or, putting it another way, $1 buys more in francs at 
the high rate than it buys at the low rate. 

Instead of saying exchange on London or exchange on 
Paris i": is the common practise to abbreviate the expression 
to London exchange or Paris exchange. 

Exchange is in favor of one country and against another 
when the balance of trade (or balance of international account) 
between the two countries is in favor of the first and against 
the second. In other words, exchange is in favor of a credit- 
or country and against a debtor country. 

High cost for exchange implies that the balance is against 
the country where the high cost prevails ; conversely, low cost 
for exchange implies that the balance is in favor of the country 
where the low cost prevails. 

It is the custom to speak of exchange on Great Britain as 
sterling (not as sterling exchange), on France as francs, on 
Germany as reichsmarks, on the Netherlands (Holland) as 
guilders, and so on. 

Foreign bills of exchange are not said to have been dis- 
counted, but to have been sold. 

Foreign exchange loan. When a loan of foreign exchange 
is made exchange is loaned ; the money represented by the 
exchange is not loaned, but a bill of exchange is loaned. If 
the borrower has an obligation that is payable at home he may 
use the bill in meeting it or he may sell the bill and use 
instead the money received for it. If the obligation is payable 
abroad he presumably will forward the bill in payment of it. 
Collateral (security) may be and generally is deposited with 
the lender. 

Sometimes — in fact, frequently — the lender of the exchange 
sells the bill and delivers the money to the borrower. When 
the loan matures (becomes due) the borrower pays it by de- 



2o8 SMITH'S FINANCIAL DICTIONARY. 

livering to the lender a sight or demand bill for the amount of 
it, which bill he has purchased for the purpose ; or, he may pay 
the lender in cash at the existing rate for sight or demand 
exchange. 

It may be that the exchange is borrowed abroad, in which 
case the borrower is authorized to draw on the lender for the 
amount borrowed. The borrower makes out a draft, which 
is accompanied with the' letter granting authority to draw, and 
if collateral is to be provided the draft also is accompanied 
with stocks, bonds, bill of lading, warehouse receipts or what- 
ever form of security is stipulated. 

If the borrower has an obligation that is payable at home he 
may use the bill (draft) itself in meeting it or he may sell the 
bill and use instead the money received for it. If the obliga- 
tion is payable abroad he presumably will forward the bill in 
discharging it. 

A loan in pounds sterling is called a sterling loan or a loan 
of sterling ; one in francs is called a loan of francs ; one in 
reichsmarks is called a loan of reichsmarks, and so on. 

Foreign exchange rates. The quotation "actual rate" means 
the rate at which exchange is sold in large amount by a dealer ; 
the quotation "posted rate" means the preliminary asking rate 
of the day before an actual rate is made and this is the rate 
usually exacted for a small amount of exchange by a dealer. 
The actual and posted rates are the rates at which dealers sell 
bills of exchange issued by themselves. They do not as a 
rule announce the rates at which they will buy commercial 
bills of exchange ; that is a matter of negotiation arid depends 
on the nature of the bills. The newspapers, howeiver, publish 
approximate prices for commercial bills. 

Foreign exchange is payable in the money of the country 
upon which the exchange is drawn — that is, where the ex- 
change is payable. 

The exact equivalents (making no allowance for interest or 
any other charge) calculated in the way that exchange is 
quoted in the United States are for diflferent moneys as follows : 
$4.86.65 equals £1 (Great Britain); $1 equals 5.18 francs 
(France, Switzerland, Belgium) ; 4 marks (Germany) equals 
95.2 cents ; i guilder or florin (Holland — the Netherlands) 



SMITH'S FINANCIAL DICTIONARY. 209 

equals 40.2 cents ; i krone or crown (Sweden, Norway, Den- 
mark) equals 26.8 cents ; I krone or crown (Austria) equals 
20.3 cents; $1 equals 5.18 lire (Italy). 

The equivalent of $1 in English money is 49.3 pence or 4 
shillings 1.3 pence; 

When foreign exchange is quoted in the money of the 
country wdiere it is bought the unit of money of the country 
where payable is figured at so much in the money of the coun- 
try where the bill is issued. Thus, when sterling exchange is 
quoted at $4.86.65 £1 in exchange is worth $4.86.65. 

When foreign exchange is quoted in the money of the coun- 
try where it is payable (not where it is bought) the unit of 
money of the country where it is bought is figured at so much 
in the money of the country where the bill is payable. Thus, 
when exchange on France is quoted at 5.18 (5 francs 18 cen- 
times) $1 in exchange is worth 5.18 francs. _ 

When a bill of exchange is quoted in the money of the 
country in which it is issued, but is payable (is to be paid) 
in the money of the country upon which it is drawn (where 
it is payable), the higher the quotation (or rate) the 
higher is the cost of such exchange for the reason that a high 
rate requires more of the money of the country where the bill 
is purchased to buy a given amount of the money of the coun- 
try where the bill is payable than a low rate requires. 

On the other hand, when a bill of exchange is quoted in the 
money of the country upon which it is drawn (which is also 
the money in which it is to be paid) , as francs, the higher the 
quotation the less is the cost of such exchange for the reason 
that more in the foreign country's money can be purchased for 
$1 at a high rate than can be purchased at a low rate. 

Illustration : If exchange for £ i is purchased for $4.89 it 
costs more than if purchased at $4.84. On the other hand, if 
exchange for 5.25 francs (.5 francs 25 centimes) is purchased 
for $1 it costs less than if $1 is paid for 5. 11 francs; or, putting 
it another way, $1 buys more in francs at the high rate than it 
buys at the low rate. 

The amount paid for a time bill depends on the length of 
time it has to run and the rate of interest prevailing in the 
country where the bill is payable. A commercial bill payable 



210 SMITH'S FINANCIAL DICTIONARY. 

in London three months after date is bought by a dealer in 
exchange in New York at a price which is equal to a bill pay- 
able on demand, less three months' interest at the existing rate 
of interest in London. The London rate of interest serves as 
the basis in calculating the price of the bill for the reason that 
the bill is payable in London and to make it equal to a draft 
payable on demand in London it must be discounted in 
London. 

High cost for exchange ordinarily means that the interna- 
tional balance is against the country where the high cost pre- 
vails ; conversely, low cost for exchange ordinarily means that 
the international balance is in favor of the country where the 
low cost prevails. 

Foreign loan. A loan issued by a foreign government in the 
form of bonds or other certificates of debt, such as exchequer 
bills or notes, treasury bills or notes, etc. 

The term foreign loan also is applied to a loan obtained in a 
foreign country by a corporation, firm or individual. In the 
case of such a loan the usual practise, if security is to be pro- 
vided, is for the borrower to draw against the loan and to ac- 
company the draft with collateral which may be securities 
(stocks or bonds) or documents (bills of lading, warehouse 
receipts, etc). 

Also see Foreign exchange loan. 

Foreign money. The money of another country. For in- 
formation as to all moneys see Moneys of the world. 

Foreign port stocks. This term applies to stocks of grain 
in warehouses at the leading ports of Europe. 

Foreign rails. London Stock Exchange designation for the 
securities of railway companies in foreign countries (except 
Americans, which are dealt in in a market of their own). 

Foreign trade. Same as external trade or commerce ; the 
exports and imports of a country ; that is, its trade (purchases 
and sales) with another country. 

Forfeiture. Loss of property by some act or omission. 

For honor. See Acceptance for honor ; also see Payment for 
honor. 

For money. The London Stock Exchange term which is 
equivalent to for cash ; see For cash. 



SMITH'S FINANCIAL DICTIONARY. 211 

For shipment. Anything bought for shipment is bought 
with the provision that it shall be shipped at or within a speci- 
fied time. 

For the account. When securities are bought or sold for 
the account the transaction is a marginal one (on margin) for 
the account and risk of the buyer or the seller, as the case 
may be. 

In a marginal transaction the presumption is that in case of 
a purchase the securities are to be sold at a subsequent time, 
while in the case of a sale the presumption is that the securities 
are to be bought back later. 

On the London Stock Exchange ''for the account" means 
that the securities are to be delivered and received and paid for 
in the next fortnightly settlement. For additional information 
see Account, The. 

For the coming out. London Stock Exchange term for a 
bargain (contract) in shares or stock which have been author- 
ized but not yet issued. The certificates are to be delivered 
when issued and payment is then to be made for them. In 
the New York stock market such a contract is designated 
as "when issued," meaning that the certificates are to be deliv- 
ered when issued, and are then to be paid for. 

For the long account. When stocks are bought on margin 
they are bought for the long account. The expression is little 
used except in referring to the aggregate as distinguished 
from individual buying. Buying to close short contracts is 
not, of course, buying for the long account. 

For the new account. London Stock Exchange term for 
bargains (transactions) which are to be included in the ac- 
count following a fortnightly settlement. The new account 
begins on the first day of the fortnightly settlement. 

For the opening. When a stock is sold for the opening de- 
livery of it to the purchaser is to be made on the opening of the 
transfer books of the company which issued it. The delay in 
delivery until that time is because the stock has been assigned 
to a specified individual by the original owner instead of hav- 
ing been assigned (or signed) in blank (see Assigned in 
blank) and, therefore, not being a delivery (not being in de- 



212 SMITH'S FINANCIAL DICTIONARY. 

liverable form) it is necessary to wait until a new certifi- 
cate can be obtained before making delivery to the buyer. 

Also see At the opening. 

For the short account. When stocks are sold short on 
margin they are sold for the short account. The expression is 
little used except in referring to the aggregate as distinguished 
from individual short selling. 

Fortnightly settlement. See Settlement, The. 

Forward delivery. Delivery at a future time; same as fu- 
ture delivery. 

Forwarder. A person, firm or corporation whose business 
is to receive goods for transportation. A commission is 
charged for storing the goods and delivering them to the line 
by which they are to be transported. 

Forwarding merchant. A forwarder; see Forwarder. 

Forwarding securities. For directions for forwarding se- 
curities see Investment securities. 

Forward quotation. The price for delivery at a future 
specified date. 

For whom it may concern. Same as for account of whom it 
may concern ; said of a sale the proceeds of which are to go to 
the one on whose behalf or for whose benefit it is made. The 
term is commonly used in auction sales when the name of the 
seller is withheld. 

For your account. When a broker on the New York Stock 
Exchange executes an order for another broker who is to re- 
ceive or deliver the stock, as the case may be, he "gives up" to 
the broker with whom he makes the transaction the name of 
his principal (the broker for whom he is acting). If the 
broker to whom he has sold or from whom he has bought 
does not wish to accept the name given up to him he says "for 
your account" and the broker who was acting for a person 
other than himself is himself obliged to assume the contract. 
A rule of the exchange is that no broker shall be compelled to 
accept a principal other than the broker offering to contract, 
unless the broker so offering shall in making the offer declare 
the name of the person whom he proposes to substitute for 
himself. 

Founders' shares. Shares which are sometimes given to 



SMITH'S FINANCIAL DICTIONARY. 213 

the founders and promoters of a company ; such shares gener- 
ally divide the surplus profits with the common shares after a 
certain percentage has been paid on the latter. These shares 
are seldom created now and are viewed with disfavor by finan- 
cial critics. 

Four ports. When this term is used with reference to ex- 
port trade it means the four principal ports on the Atlantic 
coast — Boston, New York, Philadelphia and Baltimore. 

Fourteen hundred. An expression shouted when a stranger 
wanders into the London Stock Exchange. Years ago, it is 
said, the membership of the exchange remained for nearly two 
years at 1399 and it came to be a matter of interest as to who 
should be the fourteen hundredth. One day an unmistakable 
stranger strolled into the exchange and a waggish member 
introduced him as No. 1400. 

The corresponding expression on the New York Stock Ex- 
change is New Tennessee, which see. 

Fourth week. The fourth week in a month differs from the 
other three weeks in the month in compiling and reporting 
railroad earnings. The first seven days are counted as the 
first week, the second seven days as the second week and the 
third seven days as the third week, while the remaining days 
of the month are counted as the fourth week. In a month of 
30 days the fourth week consists of nine days and in a month 
of 31 days it consists of ten days. Thus, the fourth week may 
contain two Sundays. 

For additional information see Railroad earnings. 

Fowler banking and currency bill. The name given to a 
bill providing for an asset currency which was prepared by 
the House Committee on Banking and Currency of the Fifty- 
seventh Congress and introduced by Charles N. Fowler, of 
New Jersey, chairman of the committee. For the provisions 
of the bill see Asset currency. 

Fractional coin. Same as divisional or subsidiary coin ; see 
Subsidiary coin. 

Fractional currency. Subsidiary silver coins (half-dollar, 
quarter-dollar and dime or 10 cent piece), and minor coins 
(5-cent nickel and i-cent bronze). 



214 SMITH'S FINANCIAL DICTIONARY. 

Fractional lot. Same as odd lot; in stocks less than loo 
shares of stock and less than $10,000 bonds. 

Franchise. A privilege conferred by grant from a govern- 
ment (national, state or municipal) to a corporation or an 
individual. The right obtained from the proper authority to 
build a railroad from one point to another constitutes a fran- 
chise. 

Franking. When the franking privilege in the mails is 
accorded the person possessing it is permitted to send mail 
matter free by writing or stamping his name on the envelope 
or package. Members of Congress are allowed to frank (send 
free) public documents. 

The franking privilege is sometimes accorded to persons 
for special reasons by telegraph companies, express compa- 
nies, etc. 

Fraud. Expulsion is the penalty for any member of an ex- 
change convicted by its governing body of fraud in his deal- 
ings with another member or with a non-member. There is 
no lesser penalty. 

Fraudulent conveyance. A conveyance without adequate 
consideration, made for the purpose of delaying, hindering or 
defrauding creditors. 

Free alongside ship. A mercantile term ; means that goods 
are delivered alongside (by the side of) the ship, with all 
charges paid up to that time. The buyer's responsibility then 
begins and includes the placing of the goods on board the ship. 

Free banking system. Previous to the panic of 1835 there 
were no general laws in any of the states providing for the 
incorporation of banking associations. Each bank operated 
under a special charter passed for its own benefit. This sys- 
tem of incorporation had aroused much opposition on the 
grounds of monopoly, favoritism and corruption and log- 
rolling in the various legislatures. After the panic of 1835 
there was an agitation in favor of general banking laws under 
which any body of men associated together for the purpose 
could by complying with the law engage in the banking 
business. 

An essential feature of banking at that time was the privilege 
of issuing notes and the chief concern of the advocates of a 



SMITH'S FINANCIAL DICTIONARY. 215 

general or free banking system was to provide some method 
for making such notes secure and acceptable to the public. 
The device generally decided upon was to require the banks to 
deposit in the custody of the authorities of the state from 
which they received their charter approved securities equal in 
value to the notes issued. 

The first law of this character was enacted in Michigan in 
1837. New York followed in 1838. The New York law, 
which was very similar in principle to the Michigan law, pro- 
vided that any person or association of persons might receive 
from the Comptroller of the state circulating notes and after 
signing them might issue them as money by first depositing 
with the Comptroller stocks (bonds) of the United States, of 
the state of New York or any other state approved by the 
Comptroller, or bonds and mortgages on improved, productive 
and unencumbered real estate worth double the amount of the 
mortgage, exclusive of the buildings thereon, and bearing in- 
terest at not less than 6 per cent. The result was a great 
emission of notes, a great depreciation in the value of the 
notes, and the failure of many banks issuing them when they 
were required by subseqtient enactment to make provision 
for the promptredemption of their notes. 

The disastrous effects of both the Michigan and New York 
laws were attributed, however, more to faulty construction 
and poor administration than to any wrong principle. As the 
acts were gradually modified and strengthened their actual 
operation became more satisfactory and the New York law 
was practically the model for the national banking system. 

Meanwhile, many other states followed the example of 
Michigan and New York, but their laws were so loosely drawn 
and the administration of them was so bad that the grossest 
frauds were perpetrated and state bank notes became a syno- 
nym for worthlessness. Some of the devices resorted to and 
the disastrous results that followed are described under the 
head Wildcat money. 

The growing importance in banking of the deposit and dis- 
count branches of the business and the Federal tax of 10 per 
cent on the notes of state banks have since the Civil War 



2i6 SMITH'S FINANCIAL DICTIONARY. 

eliminated the entire question of note issuing from the calcula- 
tions of state banks operating under the free banking system. 

Free bonds. United States bonds owned by national banks 
which are not pledged as security for circulation or govern- 
ment deposits are designated as free bonds. 

Free coinage. The coinage into money without charge of 
metal deposited in a mint or other government depository by 
individuals. In the United States gold is the only metal to 
which the privilege of free coinage is extended. 

When bullion is bought and coined by a government, as in 
the case of silver, the profit or seigniorage belongs to it ; this is 
termed coining on government account. 

Free gold. Same as net gold ; the amount of gold held in 
the Treasury of the United States in excess of the sum re- 
quired to redeem gold certificates outstanding. Free gold in- 
cludes the $150,000,000 gold reserve. 

Free list. The free list on the New York Stock Exchange 
has been abolished. 

Formerly business was begun with the calling of a regular 
list of stocks and bonds and bids and offers were made as the 
names of the securities were called out. This list comprised 
the stocks and bonds actively dealt in. After this regular call 
if there was a request for the recalling of a stock or bond the 
request involved the payment of a fee of 12 1-2 cents. 

Then there was a free list composed of inactive stocks and 
bonds. The names of these securities were called on request 
and no fee was exacted for calling. 

• Free market. A free market in stocks is one in which secu- 
rities are freely dealt in; it is the same in commodities. 

Free of average or free of particular average. An insurance 
of goods shipped whereby the owner is to be ''free of loss" or 
saved from loss in case of damage. 

Free on board. Grain or goods delivered free on board car 
or vessel ; that is, with all charges paid or included up to that 
time. 

Free overside. A mercantile term ; goods sold free overside 
are sold free out of the vessel (free of charges up to the time of 
discharge from the vessel). The seller's responsibility ceases 



SMITH'S FINANCIAL DICTIONARY. 217 

as soon as the goods have left the vessel. Ex-ship or ex- 
steamer has the same meaning. 

Free port. A port free for trading vessels of all nations or 
a port where no duties are levied on articles of commerce. 

Freight. Goods or materials transported by a carrying com- 
pany. The term is also sometimes applied to the charges im- 
posed for transporting the goods or materials. 

Freight density. A term used in railroad accounting, mean- 
ing the result obtained when the number of tons carried one 
mile is divided by the number of miles of road operated. 

Freight miles or freight mileage. A term used in railroad 
accounting, meaning the number of tons of freight carried one 
mile. 

Freight traffic. Freight (merchandise, etc.) transported by 
a railroad or other carrying line. 

Frozen out. Excluded or shut out. For instance, if the 
majority interest in a corporation so adjusts matters as to 
control to the exclusion of the minority interest the minority 
interest is said to have been frozen out. 

Likewise, if a member of a board of directors is objection- 
able to the other members and their combined opposition to 
him in the affairs of the concern impels him to retire from the 
board he is said to have been frozen out. 

Full-paid stock. That which subscribers (persons who sub- 
scribe for the stock) have paid for in full. 

Full stock. Stock of the face value of $100; half-stock is 
of the face value of $50 and quarter-stock is of the face value 
of $25. 

Fund. A sum of money accumulated or set aside, usually 
for a special purpose, as a sinking fund or redemption fund. 

Also see Funds. 

Funded. Converted into a permanent loan, as into bonds 
or some other security, and payable at a future time, with in- 
terest. 

Funded debt. General outstanding debts which have been 
converted into bonds or annuities. 

Funded debt is a term for the liabilities of the British gov- 
ernment such as have been issued in the form of permanent or 
long-dated securities, as distinguished from the floating debt, 



2i8 ' SMITH'S FINANCIAL DICTIONARY. 

which is in the form of Exchequer bonds and Treasury bills 
and is regarded as temporary. The distinction is not clearly 
drawn. Experts differed, for example, as to whether the na- 
tional war loan issued in 1900 and repayable in 1910 should 
be regarded as part of the funded or the floating debt. 

Fund holder. An investor in public funds ; that is, a holder 
of government securities. 

Funding. The act or process of changing a floating or un- 
secured debt into a permanent loan. 

Funding system. A system of public finance that converts 
floating indebtedness into a funded or fixed debt. 

Fund-monger. A dealer in public funds, that is, in govern- 
ment securities. The term is not a common one. 

Funds. This term includes not only cash but checks, 
drafts and other written or printed instruments which can 
quickly be converted into cash. 

Abroad the term refers to the securities (as bonds) repre- 
senting government debts. 

Future. A contract the fulfilment of which is not required 
until a specified time in the future. Most of the dealings in 
grain, especially wheat, corn and oats, and in cotton and 
coffee, are in futures. A future is designated by the name of 
the month in which it matures. For instance, July grain, 
cotton or coffee sold in January (or in any month before July) 
is deliverable in July. 

Future delivery. Delivery at a future time. 

Future quotation. The price for delivery at a specified 
future date. 



SMITH'S FINANCIAL DICTIONARY. '219 



G 



Gage. To pledge personal property as security for a debt. 

Gage plan. This term originated in a proposition for an 
asset currency contained in the annual report of the Secretary 
of the Treasury (Lyman J. Gage) transmitted to Congress 
December 4, 1901. 

An amendment to the law was proposed whereby a national 
bank on the deposit with the Treasurer of the United States 
of 30 per cent of its capital in the form of government bonds 
at their par value and 20 per cent of its capital in United 
States legal tender notes might issue its circulating notes to 
an amount equal to its paid-in and unimpaired capital. The 
remainder of the security for the notes was to rest on the 
assets of the bank. In addition the bank was to pay semi- 
annually to the Treasurer of the United States, in trust, an 
amount equal to 1-8 of i per cent of its capital stock, such 
payment to form part of a general guarantee fund for the pro- 
tection (prompt redemption) of the notes of any bank which 
by reason of insolvency should become unable to pay its notes 
on demand. 

Garbling. The practise of money dealers of retaining new 
coins of full weight for export or melting and returning the 
light-weight ones to circulation. 

Garnishee. A person who holds money or property be- 
longing to another which has been attached for debt. 

Garnishment. Attachment for debt of money or property 
while in the hands of a third party. In Massachusetts this 
proceeding is called trustee process. 

GB. As printed on the tape by the stock ticker these letters 
mean gold bonds (bonds, the principal of and interest on 
which are payable in gold). 

General account. In a bank a general account is an account 
which is for general or miscellaneous purposes to which 
credits are added and against which checks are drawn in the 
ordinary course; a special account is one created for a special 
purpose. 



220 SMITH'S FINANCIAL DICTIONARY. 

General agent. A person appointed to act for another in 
all his affairs or in all affairs of a particular class. 

General balance. The balance of a collective account or of 
all accounts. 

General court. The half-yearly meeting of the proprietors 
(stockholders) of the Bank of England is called the general 
court. 

' General damages. Such damages as result from a wrong by 
implication of law. 

General deposit. A general deposit with a bank is a de- 
posit received and placed with the funds of the bank to be 
loaned to customers and used in the general business with 
other funds of the bank. A special deposit is a deposit for 
safe keeping; to be kept as received until called for. 

General indorsement. An indorsement in blank — that is, 
by signing the name of the indorser simply, without transfer- 
ring the paper to some particular party. 

General mortgage. A mortgage covering all the stationary 
property of a company ; same as blanket mortgage. 

General mortgage bond. A bond issued under a general 
mortgage. 

General partner. An active partner; one who participates 
in profits and is liable for debts. 

General power of attorney. Written authority to act for 
another in matters generally. 

General stock. Common or ordinary stock ; see Conurion 
stock. 

George Smith's money. The name applied to a circulating 
medium (in this case a substitute for money) devised by 
George Smith, who came to the United States from Scotland 
in 1834 and who died in London in 1899 in his ninety-second 
year, leaving a fortune estimated at £10,000,000 (about $50,- 
000,000) . 

In 1839 Smith procured the incorporation of the Wisconsin 
Marine and Fire Insurance Company and made himself its 
president. The company did not and it was not Smith's in- 
tention that it should do much of an insurance business. It 
proceeded to issue what were termed certificates of deposit in 
denominations of $1 and upward in similitude of bank bills. 



SMITH'S FINANCIAL DICTIONARY. 221 

These certificates said on their face that the amount of them 
had been deposited with the company and that they were 
payable to the bearer on demand. 

The whole Northwest had been deniided of currency by the 
financial disturbance of 1837 ^^^ there was ready employment 
for George Smith's money, which, by reason of the fact that it 
was promptly redeemed on presentation, passed everywhere 
without discount, or in other words, at its full face value. It 
was wildcat or red dog money, but it was good. 

Ghost. A colloquialism used to describe a broken down 
speculator who still haunts Wall Street. 

Gilt-edge securities. Those of superior merit. 

Give on. London Stock Exchange term ; a broker or dealer 
who has bought a stock and does not wish to take it up says he 
will give on it when he is willing to pay a contango (carrying- 
over charge) for the privilege of continuing his bargain (con- 
tract) to the succeeding fortnightly settlement ; a broker or 
dealer who has sold a stock and does not wish to deliver it 
says he will take it in when he is willing to borrow the stock 
and either receive a contango or, if the stock is much oversold, 
pay a backward! at ion for the privilege of postponing delivery to 
the succeeding fortnightly settlement. 

Giver on. London Stock Exchange term for an operator 
who has bought stock which he does not wish to pay for and 
take up and so gives a contango rate to a money lender who 
will take the stock up for him ; or the term applies to a bear 
who is short of the stock and wants to borrow the stock for 
delivery. The effect of this operation is that the buyer con- 
tinues his bargain (contract) to the next fortnightly settle- 
ment.- When the stock is much oversold the buyer who lends 
the stock receives a premium from the seller for postpone- 
ment of delivery. This premium is called backwardation. 

Giving up. The broker in stocks who executes an order for 
another broker and whose connection with the transaction 
ends there "gives up" to the broker to whom he sells or from 
whom he buys the name of the broker (or brokerage firm) for 
whom he is acting, which broker (or firm) completes the trans- 
action. 



222 SMITH'S FINANCIAL DICTIONARY. 

GM. As printed on the tape by the stock ticker these let- 
ters mean general mortgage. 

G. M. B. These letters stand for good merchantable brand ; 
this trade term is more commonly used in Great Britain than 
in the United States. 

GNT. As printed on the tape by the stock ticker these 
letters mean land grant, as land grant bonds. 

G. O. B. These letters stand for good ordinary brand. 

Gold. Gold was probably the first metal known and the 
original sources were in Asia and Africa. Gold was worth 
13 1-3 times as much as silver in ancient Egypt; 10 times as 
much as silver in Greece and Rome before the Christian era, 
and 71-2 times as much when Caesar returned to Rome. 

The value of an ounce of fine (pure) gold is $20.67.2 ; the 
value of an ounce of gold of the standard of fineness of the 
United States government (nine-tenths fine and one-tenth 
alloy) is $18.60.5. 

Gold bank. See National gold bank. 

Gold bar. Means in bullion dealings a bar (ingot) of pure 
gold. Bars made by the government are called government 
l^ars or government assay bars ; bars made by private con- 
cerns are called commercial bars. 

Gold basis. Exists when values are based on gold money. 
Gold has a fixed value ; it is the basis or standard of commer- 
cial value the world over. 

Gold bond. A bond specifically payable, principal and in- 
terest, in gold. 

Gold brick. A colloquial term or synonym for swindle. 
The term is derived from the fraudulent operation in which a 
brick or bar of base metal covered with gold is sold as a 
brick or bar that is all gold. The expression ''buying a gold 
brick" means buying something at a supposedly low price 
v^hich as a fact is worthless. 

Gold-bug. Political nickname for an advocate of the single 
gold monetary standard. 

Gold certificate. A certificate issued against a correspond- 
ing amount of gold (coin or bars) held in the Treasury. 

Gold certificates are issued in denominations of $20, 50, $100, 
$500, $1,000, $5,000, $10,000. The issue of them is unlimited,, 



SMITH'S FINANCIAL DICTIONARY. 223 

except that it is suspended when the gold reserve in the Treas- 
ury falls below $100,000,000. Gold certificates are exchange- 
able at the Treasury for gold coin or any other money. 

Gold certificates are not legal tender, but are receivable for 
customs, taxes and all public dues and when so received may 
be reissued ; they are also available for the reserves of na- 
tional banks. They were issued payable to bearer only until 
1888, when a series payable to order was also provided by the 
Treasury Department, but in denominations of $5,000 and 
$10,000 only. Gold certificates are, in effect, merely ware- 
house receipts. 

Gold coins. Double-eagle ($20) ; weight, 516 grains; thick- 
ness, .077 inch; diameter, 1.35 inch. Eagle ($10) ; weight, 258 
grains; thickness, .060 inch; diameter, 1.05 inch. Half -eagle 
($5) i weight, 129 grains; thickness, .046 inch; diameter, .85 
inch. Quarter-eagle ($2.50) ; weight, .64.5 grains ; thickness, 
,034 inch ; diameter, .75 inch. 

The coinage of gold dollar and gold three-dollar pieces was 
suspended by the act of September 26, 1890. 

Gold dollar. A gold piece of the United States weighing 
25.8 grains, nine-tenths fine ; that is, nine-tenths gold and one- 
tenth alloy ; no longer coined. 

Gold export point. The gold export point in foreign ex- 
change is reached when the rate in one country of exchange on 
another country has advanced to the point where it is cheaper 
to ship the actual gold than to buy exchange for the purpose 
of making a remittance from the first country to the second 
country. For additional information see Gold exports and 
imports. 

Gold exports and imports. If in the course of its dealings 
with Europe a balance to the credit of America accumulates 
this balance is settled in due time either by a reversal 
of the order of things or by Europe sending gold to America 
to make up the difference. In case there is a balance in favor 
of Europe and it cannot be settled in any other way then gold 
has to be sent from America to Europe. 

The dealings between America and Europe which bring 
about a balance in favor of America and against Europe or 
in favor of Europe and against America include not only 



224 SMITH'S FINANCIAL DICTIONARY. 

commercial exports and imports, but also financial transac- 
tions, such as the sale by America to Europe and the purchase 
by America from Europe of securities. America has in the 
course of years sold vast amounts of securities to Europe, but 
many of these have been resold to America. In recent years 
America has been a considerable purchaser of European secu- 
rities, but many of these have been resold to Europe. Ameri- 
can travelers spend large sums in Europe, but European trav- 
elers spend only partially offsetting sums in America. The 
carrying trade between America and Europe is largely by 
vessels owned in Europe and therefore the ocean freight 
charges constitute an important element in favor of Europe in 
dealings between America and Europe. These things, with 
others, like individual remittances from America to Europe 
and from Europe to America, are combined in creating a bal- 
ance in favor of or against America. 

Whether gold comes from or goes to Europe depends di- 
rectly on the state of foreign exchange. If bills of exchange 
(drafts) on Europe are in excessive supply as a consequence 
of America's having an unusually large credit balance in 
Europe the bills fall below par — that is, they fall in their 
marketable value below their actual money value. If they fall 
enough they can be employed to bring gold from Europe. 
Banks or bankers who are in the exchange business buy the 
bills at their depreciated value and buy gold in Europe with 
them at their full value. They must, however, have fallen 
enough to cover the expense of packing, freight, insurance and 
loss of interest on the gold while the gold is in transit. These 
items figure up something like 3-8 of i per cent of the value 
of the gold. Therefore, any material discount on exchange 
beyond this amount will permit the importation of gold at a 
profit. 

When gold is exported the situation is reversed. Then, ex- 
change must command a premium — be selling above par. 
Banks or bankers sell bills of exchange or drafts at a premium 
to merchants or others who have remittances to make to 
Europe and buy gold at its face value to ship to Europe to 
meet the drafts — to pay them. The premium on the drafts 
must be sufficient to defray the expenses connected with the 



SMITH'S FINANCIAL DICTIONARY. 225 

exportation of the gold and something besides for profit on the 
operation. 

Gold also conies to America when the foreign owners can 
find more profitable employment for it here than in Europe. 
In such cases the American borrowers pay interest on it and 
a commission or extra charge besides. Gold likewise goes 
from America to Europe when more profitable use can be 
found for it abroad than here. 

Under ordinary circumstances gold flows from London to 
New York when demand sterling exchange is quoted in New 
York at 4.84 — 4.84 is, in other words, the normal gold import 
point. Likewise, under ordinary circumstances gold flows 
from New York to London when demand sterling exchange is 
quoted in New York at 4.89 — 4.89 is, in other words, the 
normal gold export point. 

The term specie point is sometimes used instead of gold 
point, but gold point is the term more commonly employed. 
Literally, specie means any kind of metal money, while there 
is but one meaning to gold. 

The tendency, usually, is for gold to flow from or out of the 
United States to Europe in the period from December to June 
and from Europe to the United States in the period from July 
to November. The balance of trade is normally against the 
United States from December to June. From July to Decem- 
ber the reverse is the case as the result of the exportation of 
the new crops of grain and cotton. For another thing, in this 
latter period interest rates are high as a consequence of the 
large requirements of money to pay the growers for their grain 
and cotton and high interest rates are efifective in facilitating 
the importation of gold from Europe. 

The Bank of England, the same as all other buyers and 
sellers, buys and sells United States gold coins by weight. 
The value of United States coins in English money is y6 
shillings 4 1-2 pence per ounce. The buying price of the bank 
in ordinary circumstances — the price which it pays — is 76 
shillings 3 1-2 pence ; its selling price is 3 to 3 1-2 pence higher 
than its buying price. If it desires to attract to itself United 
States coins it may raise its buyingprice above 76 shillings 41-2 
pence ; and if it desires to prevent the withdrawal of American 



226 SMITH'S FINANCIAL DICTIONARY. 

gold coins from its vaults it may raise its selling price to any 
point necessary to accomplish its purpose. It is the practise 
to speak of the buying or the selling price of the Bank of Eng- 
land for United States gold coins as its buying price or selling 
price for American eagles, although the coins actually bought 
or sold may be double-eagles ($20 pieces), eagles ($10 pieces), 
half-eagles ($5 pieces) or quarter-eagles ($2.50 pieces). 

In every country the coins of another country are bought 
and sold according to weight and fineness. British gold coins 
are eleven-twelfths fine, whereas United States gold coins are 
nine-tenths fine — that is, nine-tenths pure gold and one-tenth 
alloy, the alloy being composed of nine parts copper and one 
part silver. The gold coins of France and Germany and 
of most other gold-using countries are nine-tenths fine. 

The Bank of England usually has a supply of United States 
coin which it will sell, but it fixes its own price, which it 
raises or lowers according to the condition of its gold reserve. 
The Bank of France, which also usually has a supply of United 
States coin, employs the same system in selling it. A still 
more effective method employed by the Bank of England, the 
Bank of France and other great European banks to protect 
their gold reserves is the raising of their rates of discount. 

In a triangular operation in gold the gold goes from the 
place where exchange on the other two places is at a premium 
and it goes to the one of these two places where exchange on 
the other is at a discount. 

Thus, if exchange on both New York and Paris is at a pre- 
mium in London, while in New York exchange on Paris is at a 
discount, London will sell exchange on Paris, with the proceeds 
buy and ship gold to New York, with the gold buy in New 
York exchange on Paris and with this exchange cover (pay) 
in Paris the exchange on Paris which it (London) originally 
sold. 

Likewise, if exchange on both London and Paris is at a 
premium in New York, while in Paris exchange on London 
is at a discount. New York will sell exchange on London, with 
the proceeds buy and ship gold to Paris, with the gold buy in 
Paris exchange on London and with this exchange cover 



SMITH'S FINANCIAL DICTIONARY. 227 

(pay) in London the exchange on London which it (New 
York) originally sold. 

The profit in the operation is the premium, on the exchange 
originally sold and the discount on the exchange subsequently 
bought for use in cover (in payment) of the exchange sold, 
less the cost of shipping the gold. 

Gold import point. The gold import point is reached when 
the rate in one country of exchange on another country has 
declined to a point where it is profitable to buy exchange on 
another country and use it to buy gold in the second country 
(the country where the exchange is payable) for importation 
to the first country (the country in which the exchange is pur- 
chased). For additional information see Gold exports and 
imports. 

Gold imports. See Gold exports and imports. 

Gold movement. The export or import movement of gold. 
See Gold exports and imports. 

Lrold point. Foreign exchange is said to be at the gold point 
when it is at the point which permits the importation of gold ; 
likewise foreign exchange is said to be at the gold point when 
it is at the point which permits the exportation of gold. 

Specifically, the gold import point is reached when the rate 
in one country of exchange on another country has declined 
to a point where it is profitable to buy exchange on another 
countr}^ and use it to buy gold in the second country (the 
country where the exchange is payable) for importation to 
the first country (the country in which the exchange is pur- 
chased). 

Specifically, likewise, the gold export point is reached when 
the rate in one country of exchange on another country has 
advanced to the point where it is cheaper to ship the actual 
gold than to buy exchange for the purpose of making a re- 
mittance. 

For additional information see Gold exports and imports. 

Gold premium. The amount in excess of its face value that 
gold money (or its equivalent in bars) commands (is worth) 
in another kind of money for which it is exchanged. Thus, if 
100 gold dollars cost 200 paper dollars gold money is at a pre- 



228 SMITH'S FINANCIAL DICTIONARY. 

mium of lOO per cent and paper money is at a discount of 50 
per cent. 

A country whose paper or silver money is not exchange- 
able on equal terms for gold has a depreciated currency. 

Gold reserve. The fund in gold set aside in the United 
States Treasury for the redemption of United States notes 
(greenbacks) ; established at $100,000,000 by act of Congress, 
in 1882, which directed the Secretary of the Treasury to sus- 
pend the issue of gold certificates when the amount of gold 
coin and bullion in the Treasury available for redemption of 
United States notes should fall below that sum ; increased to 
$150,000,000 by the act of March 14, 1900. 

Gold standard. Technically, the gold standard exists where 
it is by law enacted that gold shall be the measure of value. 
Practically, gold is the universal measure of value, for in coun- 
tries where a double standard of value prevails by law silver 
coinage is limited and silver is used in the capacity of repre- 
sentative money. It is a legal tender for debts, but does not 
pass current at its bullion value, being sustained at par with 
gold by the limitation on its use and the fiat of the govern- 
ment which coins it. In silver standard countries domestic 
trade is based on silver at its bullion value, but that value in 
turn is based on the outside commerce of the country which is 
estimated in gold. So, it may be said that gold is the standard 
of the world, having been adopted as such by law as well as 
by custom in all the leading commercial nations and being 
accepted in fact by every other country. 

Gold standard act. The name commonly applied to the act 
of March 14, 1900, which declares that "the dollar consisting 
of twenty-five and eight-tenths grains of gold nine-tenths fine 
* * * shall be the standard unit of value, and all forms of 
money issued or coined by the United States shall be main- 
tained at a parity of value with this standard * "^ *." 

The act, officially designated as "Currency act, approved 
March 14, 1900," is in full as follows : 

A.n Act to define and fix the standard of value, to maintain the parity of all 
forms of money issued or coined by the United States, to refund the 
public debt, and for other purposes. 

Be it enacted by the Senate and House of Representatives of the 



SMITH'S FINANCIAL DICTIONARY, 229 

United States of America in Congress assembled. That the dollar coiit 
sisting of twenty-five and eight-tenths grains of gold nine-tenths fine, as 
established by section thirty-five hundred and eleven of the Revised Stat- 
utes of the United States, shall be the standard unit of value, and all 
forms of money issued or coined by the United States shall be maintained 
at a parity of value with this standard, and it shall be the duty of the Sec- 
retary of the Treasury to maintain such parity. 

Sec. 2. That United States notes and Treasury notes issued under 
the Act of July fourteenth, eighteen hundred and ninety, when presented 
to tb'j Treasury for redemption, shall be redeemed in gold com of the 
standard fixed in the first section of tiiis Act, and in order to secure the 
prompt and certain redemption of such notes as herein provided it shall 
be the duty of the Secretary of the Treasury to set apart in the Treasury a 
reserve fi.nd of one hundred and fifty million dollars m gold coin and 
bullion, which fund shall be used for such redemption purposes only, and 
whenever and as often as any of said notes shall be redeemed from &aid 
fund it shall be the duty of the Secretary of the Treasury to use said noteci 
'JO redeemed to restore and maintain such reserve fund in the manner fol- 
lowing, to wit : First, by exchanging the notes so redeemed for any gold 
coin in the general fund of the Treasury; second, by accepting deposits cf 
gold coin at the Treasury or at any subtreasury in exchange for the United 
States notes so redeemed; third, by procuring gold coin by the use of said, 
notes, in accordance with the provisions of section thirty-st.ven hundred of 
the Revised Statutes of the United States. If the Secretary of the Treas- 
ury is unable to restore and maintain the gold coin in the reserve fund by 
the foregoing methods, and the amount of such gold coin and bullion in 
said fund shall at any time fall below one hundred million dollars, then it 
shall be his duty to restore the same to the maximum sum of one hundred 
and fifty million dollars by borrowing money on the credit of the United 
States, and for the debt thus incurred to issue and sell coupon or regis- 
tered bonds of the United States, in such form as he may prescribe, iii 
denominations of fifty dollars or any multiple thereof, bearing interest at 
the rate of not exceeding three per centum per annum, payable quarterly, 
such bonds to be payable at the pleasure of the United States after one year 
from the date of their issue, and to be payable, principal and interest, in 
gold coin of the present standard of value, and to be exempt from the 
payment of all taxes or duties of the United States, as well as from taxa- 
tion in any form by or under State, municipal, or local authority; and the 
gold coin received from the sale of said bonds shall first be covered into 
tne general fund of the Treasury and then exchanged, in the manner here- 
inbefore provided, for an equal amount of the notes redeemed and held for 
exchange, and the Secretary of the Treasury may, in his discretion, use 
said notes in exchange for gold, or to purchase or redeem any bonds of the 
United States, or for any other lawful purpose the public interests may 
require, except that they shall not be used to meet deficiencies in the cur- 
rent revenues. That United States notes when redeemed in accordance 
with the provisions of this section shall be reissued, but shall be held in 



^3o SMITH'S FINANCIAL DICTIONARY. 

the reserve fund until exchanged fof gold, as herein provided; and the 
gold coin and bullion in the reserve fund, together with the redeemed notes 
htid for use as provided in this section, shall at no time exceed the maxi- 
mum sum of one hundred and fifty million dollars. 

Sec. 3. That nothing contained in this Act shall be construed to affect 
Lhe legal-tender quality as now provided by law of the silver dollar, or of 
any other money coined or issued by the United States. 

Sec. 4. That there be established in tiie Treasury Department, as a 
part ox the office of the Treasurer of the United States, divisions to bf 
designated and known as the division of issue and the division of redemp- 
tion, to which shall be assigned, respectively, under such regulations a? 
the Secretary of the Treasury may approve, all records and accounts rela- 
ting to th'c issue and redemption of United States notes, gold certificatfiS. 
silver certificates, and currency certificates. There shall be transferred 
from the ac^jounts of the. general fund of the Treasury of the United 
States, and tdken up on the books of said divisions, respectively,, accounts 
relating to the reserve fund for the redemption of United States notes and 
Treasury notes, the gold coin held against outstanding gold certificates, the 
United States notes held against outstanding currency certificates, and the 
silver dollars held against outstanding silver certificates, and each of the 
funds represented by these accounts shall be used for the redemption of the 
notes and certificates for which they are respectively pledged, and shall be 
used for no other purpose, the same being held as trust funds. 

Sec. 5. That it shall be the duty of the Secretary of the Treasury, as 
fast as standard silver dollars are coined under the provisions of the Acts 
of July fourteenth, eighteen hundred and ninety, and June thirteenth, eigh- 
teen hundred and ninety-eight, from bullion purchased under the Act of 
July fourteenth, eighteen hundred and ninety, to retire and cancel an equal 
amount of Treasury notes whenever received into the Treasury, either by 
exchange in accordance with the provisions of this Act or in the ordinary 
course of business, and upon the cancellation of Treasury notes silver cer- 
tificates shall be issued against the silver dollars so coined. 

Sec. 6. That the Secretary of the Treasury is hereby authorized and 
directed to receive deposits of gold coin with the Treasurer or any assist- 
ant treasurer of the United States, in sums of not less than twenty dollars, 
and to issue gold certificates therefor in denominations of not less than 
twenty dollars, and the coin so deposited shall be retained in the Treasurv 
and held for the payment of such certificates on demand, and used for no 
other purpose. Such certificates shall be receivable for customs, taxes, and 
all public dues, and when so received may be reissued, and when held by 
any national banking association may be counted as a part of its lawful 
reserve. Provided, That whenever and so long as the gold coin held in 
the reserve fund in the Treasury for the redemption of United States notes 
and Treasury notes shall fall and remain below one hundred million 
dollars the authority to issue certificates as herein provided shall be 
suspended: And provided further, That whenever and so long as the 
aggregate amount of United States notes and silver certificates in the 



SMITH'S FINANCIAL DICTIONARY. 231 

general fund of the Treasury shall exceed sixty million dollars the Secre- 
tary of the Treasury may, in his discretion, suspend the issue of the cer- 
tificates herein provided for: And provided further, That of the amount 
01 such outstanding certificates one-fourth at least shall be in denomina- 
tions of fifty dollars or less : And provided further, That the Secretary of 
the Treasury may, in nis discretion, issue such certificates in denomina- 
tions of ten thousand dollars, payable to order. And section fifty-one hun- 
dred and ninety-three of the Revised Statutes is hereby repealed. 

Sec. 7. That hereafter silver certificates shall be issued oniy of de- 
nominations of ten dollars and under, except that not exceeding in the 
aggregate ten per centum of the total volume of said certificates, in the 
discretion of the Secretary of the Treasury, may be issued in denomina- 
tions of twenty dollars, fifty dollars, and one hundred dollars ; and silver 
certificates of higher denomination than ten dollars, except as herein pro- 
vided, shall, whenever received at the Treasury or redeemed be retired 
and canceled, and certificates of denominations of ten dollars or less shall 
be substituted therefor, and after such substitution, in whole or in part, a 
like volume of United States notes of less denomination than ten dollars 
shall from time to time be retired and canceled, and notes of denomina- 
tions of ten dollars and upward shall be reissued in substitution therefor, 
with like qualities and restrictions as those retired and canceled. 

Sec. 8. That the Secretary of the Treasury is hereby authorized to 

use, at his discretion, any silver bullion in the Treasury of the United 
States purchased under the Act of July fourteenth, eighteen hundred and 
ninety, for coinage into such denominations of subsidiary silver coin as 
may be necessary to meet the public requirements for such coin : Provided, 
That the amount of subsidiary silver coin outstanding shall not at any 
time exceed in the aggregate one hundred millions of dollars. Whenever 
any silver bullion purchased under the Act of July fourteenth, eighteen 
hundred and ninety, shall be used in the coinage of subsidiary silver coin, 
an amount of Treasury notes issued under said Act equal to the cost of 
the bullion contained in such coin shall be canceled and not reissued. 

Sec. 9. That the Secretary of the Treasury is hereby authorized and 
directed to cause all worn and uncurrent subsidiary silver coin of the 
United States now in the Treasury, and hereafter received, to be recoined, 
and to reimburse the Treasurer of the United States for the difference 
between the nominal or face value of such coin and the amount the same 
will produce in new coin from any moneys in the Treasury not otherwise 
appropriated. 

Sec. 10. That section fifty-one hundred and thirty-eight of the Re- 
vised Statutes is hereby amended so as to read as follows : 

"Section 5138. No association shall be organized with a less capital 
than one hundred thousand dollars, except that banks with a capital of not 
less than fifty thousand dollars may, with the approval of the Secretary of 
the Treasury, be organized in any place the population of which does not 
exceed six thousand inhabitants, and except that banks with a capital of 
not less than twenty-five thousand dollars may, with the sanction of the 



^22 SMITH'S FINANCIAL DICTIONARY. 

Secretary of the Treasury, be organized in any place the population of 
which does not exceed three thousand inhabitants. No association shall 
be organized in a city the population of which exceeds fifty thousand per- 
sons with a capital of less than two hundred thousand dollars." 

Sec. II. That the Secretary of the Treasury is hereby authorized to 
receive at the Treasury any of the outstanding bonds of the United States 
bearing interest at five per centum per annum, payable February first, nine- 
teen hundred and four, and any bonds of the United States bearing interest 
at four per centum per annum, payable July first, nineteen hundred and 
seven, and any bonds of the United States bearing interest at three per 
centum per annum, payable August first, nineteen hundred and eight, and 
to issue in exchange therefor an equal amount of coupon or registered 
bonds of the United States in such form as he may prescribe, in denomi- 
nations of fifty dollars or any multiple thereof, bearing interest at the rate 
of two per centum per annum, payable quarterly, such bonds to be payable 
at the pleasure of the United States after thirty years from the date of 
their issue and said bonds to be payable, principal and interest, in gold 
coin of the present standard value, and to be exempt from the payment of 
all taxes or duties of the United States, as well as from taxation in any 
form by or under State, municipal, or local authority : Provided, That 
such outstanding bonds may be received in exchange at a valuation not 
greater than their present worth to yield an income of two and one-quarter 
per centum per annum ; and in consideration of the reduction of interest 
effected, the Secretary of the Treasury is authorized to pay to the holders 
of the outstanding bonds surrendered for exchange, out of any money in 
the Treasury not otherwise appropriated, a sum not greater than the differ- 
ence between their present worth, computed as aforesaid, and their par 
value, and the payments to be made hereunder shall be held to be payments 
on account of the sinking fund created by section thirty-six hundred and 
ninety-four of the Revised Statutes : And provided further, That the two 
per centum bonds to be issued under the provisions of this Act shall be 
issued at not less than par, and they shall be numbered consecutively in 
the order of their issue, and when payment is made the last numbers issued 
shall be first paid, and this order shall be followed until all the bonds art 
paid, and whenever any of the outstanding bonds are called for payment 
interest thereon shall cease three months after such call ; and there is 
hereby appropriated out of any money in the Treasury not otherwise ap- 
propriated, to effect the exchanges of bonds provided for in this Act, a 
sum not exceeding one-fifteenth of one per centum of the face value of 
said bonds, to pay the expense of preparing and issuing the same and other 
expenses incident thereto 

Sec. 12. That upon the deposit with the Treasurer of the United 
States, by any national banking association, of any bonds of the 
United States in the manner provided by existing law, such association 
shall be entitled to receive from the Comptroller of the Currency circula- 
ting notes in blank, registered and countersigned as provided by law, equal, 
in nmnunl 1o the par value of the bonds so deposited; and any national 



SMITH'S FINANCIAL DICTIONARY. 233 

banking association now having bonds on deposit for the security of cir- 
culating notes, and upon which an amount of circulating notes has been 
issued less than the par value of the bonds, shall be entitled, upon due 
application to the Comptroller of the Currency, to receive additional cir- 
culating notes in blank to an amount which will increase the circulating 
notes held by such association to the par value of the bonds deposited, such 
additional notes to be held and treated in the same way as circulating 
notes of national banking associations heretofore issued, and subject to all 
the provisions of law affecting such notes : Provided, That nothing herein 
contained shall be construed to modify or repeal the provisions of section 
■fifty-one hundred and sixty-seven of the Revised Statutes of the United 
states, authorizing the Comptroller of the Currency to require additional 
deposits of bonds or of lawful money in case the market value of the 
bonds held to secure the circulating notes shall fall below the par value 
of the circulating notes outstanding for which such bonds may be deposited 
as security: And provided further, That the circulating notes furnished 
to national banking associations under the provisions of this Act shall be 
of the denominations prescribed by law, except that no national banking 
association shall, after the passage of this Act, be entitled to receive from 
the Comptroller of the Currency, or to issue or reissue or place in circula- 
tion, more than one-third in amount of its circulating notes of the denomi- 
nation of five dollars : And provided further. That the total amount of 
such notes issued to any association may equal at any time but shall not 
exceed the amount at such time of its capital stocl^ actually paid in : And 
provided further, That under regulations to be prescribed by the Secre- 
tary of the Treasury any national banking association may substitute the 
two per centum bonds issued under the provisions of this Act for any of 
the bonds deposited with the Treasurer to secure circulation or to secure 
deposits of public money; and so much of an Act entitled "An Act to 
enable national banking associations to extend their corporate existence, 
and for other purposes," approved July twelfth, eighteen hundred and 
eighty-two, as prohibits any national bank which makes any deposit of 
lawful money in order to withdraw its circulating notes from receiving any 
increase of its circulation for the period of six months from the time it 
made such deposit of lawful money for the purpose aforesaid, is hereby 
repealed, and all other Acts or parts of Acts inconsistent with the pro- 
visions of this section are hereby repealed. 

Sec. 13. That every national banking association having on deposit, 
as provided by law, bonds of the United States bearing interest at the rate 
of two per centum per annum, issued under the provisions of this Act to 
secure its circulating notes, shall pay to the Treasurer of the United States, 
in the months of January and July, a tax of one-fourth of one per centum 
each half year upon the average amount of such of its notes in circulation 
as are based upon the deposit of said two per centum bonds ; and such 
taxes shall be in lieu of existing taxes on its notes in circulation imposed 
by section fifty-two hundred and fourteen of the Revised Statutes. 

Sec. 14. 'I'hat the provisions of this Act are not intended to preclude 



234 SMITH'S FINANCIAL DICTIONARY. 

the accomplishment of international bimetallism whenever conditions shall 
make it expedient and practicable to secure the same by concurrent action 
of the leading commercial nations of the world and at a ratio which shall 
insure permanence of relative value between gold and silver. 

Gold value. The value of any quantity or mass of gold de- 
pends upon its fineness as well as its weight. Fineness means 
the proportion of pure gold and usually it is expressed in 
thousandths. 

The coins of the United States, both gold and silver, are .900- 
fine, that is, nine-tenths pure metal and one-tenth alloy, the 
alloy in a gold coin being one part silver and nine parts cop- 
per, while that in a silver coin is copper. 

An ounce of fine (pure )gold is worth $20.67.2; an ounce of 
standard gold (.900 fine) is worth $18.60.5. 

Good delivery. While this term is colloquially in common 
use the New York Stock Exchange rules for delivery drop 
the word good as superfluous. A thing, as a stock or a bond,^ 
is a delivery (is deliverable) on a contract or is not a delivery 
(is not deliverable). For information see Delivery, A. 

Good merchantable brand. Abbreviation, G. M. B. ; this 
trade term is more commonly used in Great Britain than in 
the United States. 

Good merchantable quality and condition. A commercial 
term, meaning that the goods supplied must be of the custom- 
ary standard. 

Good ordinary brand. A commercial term ; abbreviation, 
G. O. B. 

Goods trafBc. English term for what in the United States 
is called freight traffic, or in other words, freight carried. 

Gorgonzola Hall. A facetious designation for the London 
Stock Exchange because of the resemblance of its marble 
interior walls to gorgonzola cheese. 

Goschens. London Stock Exchange name for the British 
consols bearing 2 3-4 per cent interest until 1903 and then 
21-2 per cent and redeemable in 1923. These consols were 
converted from 3 per cents by Mr. Goschen. 

Gould stocks. So called because of the preponderating 
ownernship of them by the Jay Gould estate ; the stocks of 
the Denver & Rio Grande, Missouri Pacific, Rio Grande 



SMITH'S FINANCIAL DICTIONARY. 23$ 

A\^estern, St. Louis Southwestern, Texas & Pacific, AVabash, 
and Wheeling & Lake Erie railroads, and Western Union 
Telegraph Company. 

Governing committee. The name of the general governing 
body of the New York Stock Exchange, composed of 40 per- 
sons, ten of whom are elected on the second Monday in May 
of each year to serve for the ensuing four years. The presi- 
dent and the treasurer of the exchange are added- to the gov- 
erning committee. A member of the governing committee is 
commonly called a governor. The Consolidated Stock and 
Petroleum Exchange is governed by a board of directors. The 
name of the governing body of the London Stock Exchange is 
-committee for general purposes. 

Government assay bar. This is a bar (ingot) of pure gold 
or a bar of pure silver made by and bearing the assay stamp 
of the government. A commercial bar is one made by a pri- 
vate concern ; its market value in money is fractionally lower 
than that of a government bar. 

Government bar. Same as government assay bar ; see Gov- 
ernment assay bar. 

Government bond. A bond issued by the United States 
government is commonly designated a government bond. 

Government crop report. A report issued monthly by the 
Department of Agriculture of the United vStates telling the 
condition of the various crops and furnishing other related 
information. The report is issued on the loth of the month 
and gives conditions as they existed on the ist of the month. 
A report on cotton is issued separately on the 3d of the month 
and gives conditions as they existed on the 25th of the pre- 
ceding month. 

The reports issued in the different months of the year show: 

Report of January. — Total number, compared with that of January- 
of the previous year, of horses, mules, milch cows, other cattle, hogs, and 
sheep. Average price of horses and mules per head — under one year; 
between one and two years ; between two and three years ; over three 
years. Average price of milch cows per head; average price of other 
cattle per head — under one year ; between one and two years ; between two 
and three years ; over three years. Average price of hogs per head — 
under one year; one year and over. Average price of sheep per head — 



236 SMITH'S FINANCIAL DICTIONARY. 

under one year ; one year and over. Number killed by dogs in previous 
y ar. 

Report of February. — None. 

Report of March. — The proportion of the corn crop of the previous 
year remaining in farmers' hands for consumption or sale on March i. 
Proportion of said crop that has been and will be consumed in the state, 
county, etc. Proportion of said crop which was of marketable quality. 
Proportion of said crop that yet remains in the field. Average farm value 
of the corn on hand: first, merchantable per bushel (shelled); second, 
unmerchantable per bushel (shelled). The proportion of the wheat crop 
of the previous year remaining in farmers' hands for consumption or sale 
on March i. Proportion of said crop that has been or will be consumed 
in the state, county, etc. Average weight per bushel (lbs.) of said crop 
raised in the state, county, etc., in the previous year. Oats : Proportion 
of the oat crop of the previous year remaining in farmers' hands for con- 
sumption or sale on March i. Proportion that has been or will be con- 
sumed in the state, county, etc. Average weight per bushel of the oat crop 
(lbs.) of the previous year. 

Report of April. — Condition of winter wheat and winter rye; condi- 
tion of soil during the planting season of winter wheat, whether favorable 
to seeding or germination; whether the period subsequent to seeding win- 
ter wheat has been favorable to the plant; whether the plant (winter 
-wheat) has had the usual amount of protection by snow; whether there 
has been any damage to winter wheat by Hessian flies. How many in 
every thousand have died during the previous year of horses, from dis- 
eases ; of cattle, from exposure and from disease ; of sheep, not including 
spring lambs, from exposure and from disease ; and of swine from dis- 
ease. Estimated number of breeding sows March 31, compared with that 
of March 31 of the previous year. 

Report of May. — ^What proportion of the area sown the previous fall 
in winter wheat will not be harvested; condition of growing crop of 
winter wheat ; condition of crop of winter rye ; condition of meadow mow- 
ing lands ; condition of spring pasture ; the proportion of spring plowing 
already done. Acreage of cotton ; average condition of cotton. 

Report of lune. — Condition of winter wheat ; acreage and condition 
of spring wheat; acreage and condition of winter and spring rye; acreage 
and condition of oats ; acreage and condition of barley. 

Report of luly. — Estimated area of corn and Irish potatoes planted 
during the year; percentage of wheat crop of previous year still on hand; 
condition of corn, of winter wheat, of spring wheat, of winter rye, of 
spring rye, of oats, of barley, of Irish potatoes. Average weight per 
fleece of wool (lbs.). Condition of cotton. 

Report of August. — Quality of oats on hand; acreage of buchwheat 
and hay; condition of corn, of spring wheat, of oats, spring rye, barley, 
buckwheat, potatoes (Irish), sweet potatoes, hay, condition of cotton. 

Report of Sepfciiibcr. — Conditions of corn, potatoes (Irish), sweet 
potatoes, buckwheat, wheat. Condition when harvested of wheat, oats, 



SMITH'S FINANCIAL DICTIONARY. 2sr 

barley, and rye. Number of hogs and condition as to healthfulness and 
flesh. 

Report of October. — Condition of corn; average yield and quality of 
the crops of wheat, oats, rye, and barley. Condition of buckwheat, Irish 
potatoes, sweet potatoes, tobacco, apples, rice, and sugar cane. Average 
yield, quality, and percentage production of hops. Condition of cotton. 

Report of November. — Average yield per acre of corn per bushel, 
shelled ; quality of corn ; old corn on hand from crops of previous years ; 
average yield per acre and quality of buckwheat, Irish potatoes, hay. 
and tobacco; average yield per acre of rice; production of sugar cane. 

Report of December. — Production and average price per bushel on 
December i of corn, wheat, oats, rye, barley, buckwheat, Irish potatoes, 
sweet potatoes, hay, and rice. Area sown and average condition of winter 
wheat, winter rye. Average price per pound of cotton and leaf tobacco. 

In reporting the condition of the crops the basis is loo^ 
which stands for a normal condition. Therefore, a condition 
above loo is above the normal, while a condition below lOO is 
below the normal. 

A normal condition is a condition that indicates a full crop — 
not an average crop, which lacks something of being a full 
crop ; nor yet an extraordinary crop, which is more than (is in 
excess of) a full crop. 

The normal condition, or a condition of lOO per cent, is de- 
fined as follows in ''The Crop Reporter," a publication of the 
Department of Agriculture : 

THE NORMAL. 

So many of the reports of the Statistician of the Department of Agri- 
culture are based upon a comparison with the "normal" that it is a matter 
of the greatest importance that there should be a clear understanding of 
what the normal really means. 

To begin with, a normal condition is not an average condition, but a 
condition above the average, giving promise of more than an average crop. 

Furthermore, a normal condition does not indicate a perfect crop, or 
a crop that is or promises to be the very largest in quantity and the very 
best in quality that the region reported upon may be considered capable of 
producing. The normal indicates something less than this, and thus 
comes between the average and the possible maximum, being greater than 
the former and less than the latter. 

The normal may be described as a condition of perfect healthfulness, 
unimpaired by drought, hail, insects, or other injurious agency, and with 
such growth and development as may reasonably be looked for under 
these favorable conditions. As stated in the instructions to correspond- 
ents, it does not represent a crop of extraordinary character, such as 
may be produced here and there by the special effort of some highly 



238 SMITH'S FINANCIAL DICTIONARY. 

skilled farmer with abundant means, or such as may be grown on a bit of 
land of extraordinary fertility, or even such as may be grown quite exten- 
sively once in a dozen years in a season that is extraordinarily favorable 
to the crop to be raised. A normal crop, in short, is neither deficient on 
the one hand nor extraordinarily heavy on the other. While a normal 
condition is but rarely reported for the entire corn, wheat, cotton, or other 
crop area, at the same time or in the same year, its local occurrence is by 
no means uncommon, and whenever it is found to exist, it should be indi- 
cated by the number lOO. 

Sometimes a favorable season for planting is followed by a favor- 
able growing season, with no blight and no depredations by in- 
sects, the result being a normal condition. At other times the normal 
may be maintained by conditions that are exceptionally favorable in one 
or more particulars counterbalancing conditions that are unfavorable in 
other particulars. Thus, a crop may have had such an unusually good 
start that it may pass without injury through a period of drought that 
would otherwise have proved disastrous to it, or its more than ordinary 
vigor and potentiality may fully offset some slight injury from insects. 

The normal not being everywhere the same, in determining how near 
the condition of any given crop is to the normal correspondents will 
usually find it an advantage to have a definite idea of what yield per acre 
would constitute a full normal crop in their respective districts ; that is, 
how many bushels, pounds, or tons per acre of a particular crop would be 
produced in a season that was distinctly but not exceptionally favorable. 
In a region where 30 bushels of corn may be taken as the normal, a condi- 
tion of 90 would give a prospect of a crop of 27 bushels, and 80 a crop of 
24 bushels. If 40 bushels be considered the normal yield, 90 (or ten per 
cent less than the normal) would indicate a crop of 36 bushels, 80 one of 32 
bushels, 70 one of 28 bushels. 

For the reason that the normal, represented by 100, does not indicate 
a perfect or the largest possible crop, it may occasionally be exceeded. 
The condition may be so exceptionally favorable as to promise a crop that 
will exceed the normal, and it will accordingly have to be expressed by 
105, no, or whatever other figures may seem warranted by the facts; 
105 representing five per cent above the normal, no ten per cent, and so 
forth. 

Government depository. A national bank designated to re- 
ceive deposits of taxes and other public dues collected by the 
national government. Security has to be provided for the 
safe keeping and delivery of these funds. 

Government note. A name sometimes applied to paper 
money issued by the government, to distinguish it from a bank 
note — a note issued by a national bank. 

Governments. As a financial term this word means securi- 
ties issued by the United States government. 



SMITH'S FINANCIAL DICTIONARY. 239 

Grace. Three days directly following the maturity of a 
promissory note or bill of exchange (draft) allowed debtors 
by law in some states in which to make payment. 

In most states grace has been abolished on all forms of 
paper. In some states grace is not allowed on demand drafts, 
but is allowed on sight drafts ; in other states it is allowed on 

iDOth. 

A note payable on January i, with grace, is in all respects 
the equivalent of a note payable on January 4, without grace. 
The first named note is not due in fact or in law until January 
4. Interest is to be paid for the three days of grace as for any 
other portion of the time the note has to run. The holder 
cannot demand payment until the days of grace of payment 
have expired and the debtor can-not make payment, except 
with the consent of the holder, until such time. Should the 
note be paid before the last da}^ of grace and not be taken up 
any purchaser who might obtain it from the holder for a valu- 
able consideration before the last day of grace in ignorance 
of the fact that payment of it had been made could enforce it 
notwithstanding such payment. He would be a holder who 
had taken the note before maturity. The effect of grace is 
simply to postpone the date of payment precisely as might be 
done in a jurisdiction where grace did not prevail by making 
the paper payable upon its face and by its express terms upon 
the date upon which the last day of grace falls. 

Grain. The term grain as ordinarily used is construed as 
meaning wheat, corn and oats. 

Grain bill. A draft (bill of exchange) drawn against the 
buyer or consignee of a shipment of grain. The bill of lading 
is attached to (accompanies) the draft and is surrendered on 
payment or acceptance, as the case may be, of the draft. 

Granger railroads. Wall Street name for the Chicago & 
Alton ; Chicago, Burlington & Quincy ; Chicago, Rock Is- 
land & Pacific ; Chicago, Milwaukee & St. Paul, and Chi- 
cago & Northwestern railroads. These railroads are called 
granger roads because they are largely dependent for their 
earnings on the grain and other farm (grange) produce which 
they carry. 

Grant & Ward panic. So called because it had its inception 



240 SMITH'S FINANCIAL DICTIONARY. 

in the failure on May 6, 1884, of the banking and stock brok- 
erage firm of Grant & Ward, of which ex-President U. S. 
Grant was senior partner. The failure of the Marine Bank, 
the Metropolitan Bank and many stock brokers followed. 
Great dishonesty was disclosed in the affairs of Grant & Ward 
and the Marine Bank. Ex-President Grant was not involved, 
but his partner, Ferdinand Ward, and James D. Fish, who 
was president of the Marine Bank, were sent to prison for 
their part in the irregularities. 

Granted a quotation. The term used when a security is ad- 
mitted to dealings on the London Stock Exchange. 

Gratuity fund. An insurance fund from which a payment 
is made to the family of a deceased contributor to it. Nearly 
all exchanges have gratuity funds. 

Greenback. The legal tender note officially designated as 
the United States note ; called greenback because the back is 
printed in green ; see United States note. 

Gresham's law. This is not an enactment but a law of 
political economy as expounded by Sir Thomas Gresham, a 
former master of the British mint. It is that where there are 
two forms of money the inferior or depreciated tends to 
drive the other from circulation owing to the hoarding and 
exportation of the better form. As commonly stated, bad 
money drives out good. 

Gresham's words were : ''When two sorts of coin are cur- 
rent in the same nation, of like value by denomination, but not 
intrinsically, that which has the least value will be current and 
the other as much as possible will be hoarded." 

Gross. All ; the entire amount. For instance, the gross 
earnings of a company are its entire earnings. 

Gross earnings. Total earnings. 
' Gross ton. Same as long ton ; 2,240 pounds ; a short ton is 
2,000 pounds. A. metric ton is 2,204.6 pounds. 

Ground floor. A colloquialism. When one is permitted to 
acquire securities of a company on more favorable terms than 
the general public (as, for instance, a member of an under- 
writing syndicate) he is said to have been let in on the ground 
floor. 

G. T. C. When these letters are used on an order to buy or 



SMITH'S FINANCIAL DICTIONARY. 241 

sell stocks or commodities they mean that the order is good 
till countermanded or good till canceled. 

GTD. As printed on the tape by the stock ticker these let- 
ters mean guaranteed, as bonds the interest or the interest 
and principal of which are guaranteed by a company other 
than the one which issued them. 

Guarantee. Same as guaranty ; see Guaranty. 

Guaranteed bond. A bond the payment of the principal of 
and interest on which is guaranteed by another. A railroad 
which leases another railroad usually guarantees the principal 
of and interest on the bonds (and often the dividends on the 
stock) of the leased road. 

Guaranteed signature. A signature the genuineness of 
which is guaranteed by some one other than the writer of it. 

Guaranteed stock. A stock the dividends on which are 
guaranteed by a company other than the one which issued it. 
A railroad which leases another railroad usually guarantees 
the dividends on the stock of the leased road. 

Guarantor. One who guarantees or insures a payment. 

Guaranty. Same as guarantee ; an undeftaking by one per- 
son to be responsible for the payment of a debt of another or 
for the performance of a contract by another who stands first 
bound to pay or perform. 

A guaranty is ahvays enforceable in accordance with the 
strict meaning of its terms. But a guaranty of payment and 
a guaranty of collection impose very different obligations on 
the guarantor. A guaranty of collection is an undertaking by 
the guarantor that the debt will be paid if and after the cred- 
itor employs all the means within his power to collect it. The 
guarantor cannot be held until the principal debtor has been 
sued and judgment secured against him and an execution 
under that judgment has been returned unsatisfied. 

But one who guarantees the payment of an obligation is in 
default the moment the debt is due and unpaid. For he has 
not guaranteed merely that it can be collected through the 
usual processes, but that it will be paid when due. If it is not 
so paid suit may be brought against the guarantor, not only 
before any suit has been brought against the principal debtor, 
but even before any demand of payment has been made upon 



242 SMITH'S FINANCIAL DICTIONARY. 

him. If the principal does not pay promptly when the debt is 
due, without demand, the guarantor immediately becomes 
liable. 

Guilder. The former name for the unit of value in the 
Netherlands. The present official name for the coin is florin, 
but the old name, guilder, is still retained in transactions in 
foreign exchange. Value, 40.2 cents. 

Guinea. An English gold piece, not coined since 1817, 
worth 21 shillings or $5.10.98. It derived its name from the 
fact that it was first coined in 1663 from Guinea gold. 

Guinea pig director. London Stock Exchange term for di- 
rectors who are willing to serve on the board of as many com- 
panies as possible merely for the sake of the fees that they 
receive. The term is said to be derived from the guinea fee 
that is in some cases paid for each attendance. 

Gunning for shorts. A Wall Street colloquialism, signify- 
ing that means are being employed to compel bears to cover 
their shorts, or in other words, to buy back the stocks they 
sold short. 



H 



Half-dime. A silver piece formerly issued worth 5 cents. 

Half-dollar. The silver coin weighing 192.9 grains ; it is .057 
inch thick and its diameter is 1.2 inch. 

Half-eagle. A name given to the $5 gold coin of the United 
States; weight, 129 grains; thickness, .046 inch; diameter, .85 
inch. 

Half-stock. Stock of the par value of $50 instead of $100 
as usual. Stock of the par value of $100 is called full stock. 

Hallmark. English ; an official mark stamped on articles of 
gold or silver to indicate that they are of standard quality. 

Hammered. Said when a member of the London Stock 
Exchange is declared a defaulter — that is, when he fails to 
meet his contracts. 



SMITH'S FINANCIAL DICTIONARY. 243 

The head waiter (attendant), acting under instructions from 
the committee for general purposes, strikes three blows with 
his wooden hammer or mallet on his rostrum to secure atten- 
tion, after which he announces that "Mr. Blank is unable to 
comply with his bargains" (contracts). 

Hammered dollar. Mexico when released from the rule of 
Spain retained a large amount of Spanish silver coins. The 
royal efifigy on the silver dollar was officially battered or ham- 
mered out of recognition, which served the double purpose 
of testifying to the emancipation of Mexico and of keeping the 
coins at home. The silver dollar thus defaced was commonly 
designated as the hammered dollar. 

Hammond's time. At 14 minutes after 2 p. m. on each busi- 
ness day except Saturday the words "Hammond's time" are 
printed on the tape by the stock ticker and afterwards the 
lever of the instrument sounds fifteen beats. When the fif- 
teenth beat is sounded it is 2.15 p. m. and the end of the time 
for the delivery of securities in settlement of contracts entered 
into on the New York Stock Exchange which mature on the 
current day. Failure by a seller to deliver to a purchaser by 
2.15 stocks sold on the New York Stock Exchange previously 
in the day for cash (see For cash) or sold in the regular way 
(see Regular way) on the preceding day constitutes a default 
by the seller on the contract. 

A watchmaker named Hammond supplies the stock ex- 
change with its official time ; hence the name Hammond's 
time. In speaking of Hammond's time it is the habit to ab- 
breviate it to simply "time»" 

The stock exchange time was formerly supplied by a 
watchmaker named Ladd and it then was known as Ladd's 
time. 

Hand-to-hand money. This term applies to money of small 
denominations such as ordinarily passes between individuals 
or ordinarily is used in trade. 

Hard. Said when rates, prices or markets are higher. 

Hard coal. A common name for anthracite coal. For addi- 
tional information see Anthracite coal. 

Hard money. A colloquial name for coins of gold and 
silver, as distinguished from soft or paper money. 



244 SMITH'S FINANCIAL DICTIONARY. 

Hard spot. A stock or a group of stocks displaying pro- 
nounced strength in an otherwise generally weak market. 

Head-money. A per capita tax; a premium or bonus of so 
much per head. 

Hectolitre. The unit of grain measurement in France ; 2.83 
bushels. 

Hedging. An operation intended as a protection against 
loss in another operation. Usually hedging is selling against 
a purchase or purchasing against a sale ; but, as in stocks, it 
may be buying or selling one stock to offset a possible loss 
in another. 

Hog products. In speculation these are pork lard and 
short ribs. Other hog products are sides, hams, shoulders and 
bacon. 

Holder. This term applies to one who has possession of 
or holds for collection any negotiable instrument, as a check, 
bill of exchange (draft) or promissory note. 

Also, one who owns securities (stocks and bonds) is a holder 
of securities. 

Holder of procuration. One who holds or has the power to 
sign per procuration ; see Per procuration. 

Holding company. Same as securities company ; a com- 
pany which owns the securities of other companies and de- 
pends for its income upon the interest and dividends yielded 
by these securities. It usually issues bonds as well as stock 
itself. Its bonds are collateral trust bonds, being secured by 
the bonds or stocks of other companies that it owns. A hold- 
ing company is not necessarily a controlling company — it is 
not necessary that it should possess a majority of the stocks of 
the companies whose securities constitute or are included in 
its assets. 

Holding the bag. A Wall Street colloquialism ; said of an 
unwilling buyer. For example, a speculator or a pool may 
have arranged to buy a certain amount of a particular stock in 
expectation of an advance in it only to find out when the pro- 
posed amount has been accumulated that it is necessary in 
consequence of free offerings to continue purchases to pre- 
vent a fall in the price. If the speculator or pool keeps on 



SMITH'S FINANCIAL DICTIONARY. 245 

buying he or it is, in Wall Street parlance, holding the bag — 
that is, receiving stock that others wish to part with. 

A speculator or pool may hold the bag in grain, cotton, 
coffee or any other speculative commodity as well as in a 
stock. 

Holding the floor. Possessing the first right to buy or to 
sell in accordance with exchange rules. See Floor rules. 

Holding the market. Keeping the market steady — buying 
to prevent a decline or selling to prevent an advance. 

Also, possessing the first right to buy or sell a stock (as on 
an exchange ; see Floor rules) is holding the market (for that 
stock). 

Holiday. See Bank holidays ; also see Legal holiday. 

Home commerce or trade. Same as domestic commerce 
or trade ; commerce or trade exclusively within the limits of 
a particular country. 

Home rails. London Stock Exchange name for the shares 
of railroads in Great Britain. 

Honeycombed with stop orders. Said when a speculative 
market contains many stop orders ; see Stop order. 

Honored. Said when the drawee (the one who is to accept 
or pay) accepts or pays (as required) a bill of exchange 
(draft) on presentation to him. 

Hours of business. See Business hours. 

House, The. Among members of the London Stock Ex- 
change the exchange is called the house, the same as in New 
York the stock exchange is called the board. 

Hypothecation. The pledging of securities or other prop- 
erty as collateral for loans. When securities are pledged for 
a loan the title to them is surrendered to the bank or other 
lender with which or whom they are pledged. 

On the London Stock Exchange stock pledged as collateral 
is said to be pawned. 

Hypothecation certificate. A certificate lodged by the seller 
with the buyer of a bill of exchange drawn against a shipment 
of property ; it describes the nature of the shipment and states 
that the bill of lading, insurance policy, etc., are lodged and 
pledged with the holder of the bill of exchange as security for 
the payment of the bill (or for the acceptance of the bill) by 
the drawee (the one drawn upon). 



246 SMITH'S FINANCIAL DICTIONARY. 



I 



I. As printed on the tape by the stock ticker this Roman 
numeral means first, as first mortgage bonds or first income 
bonds or first preferred stock. 

II. As printed on the tape by the stock ticker these Roman 
numerals mean second, as second mortgage bonds or second 
income bonds or second preferred stock. 

III. As printed on the tape by the stock ticker these 
Roman numerals mean third, as third mortgage bonds or 
third income bonds. 

Identification of a stockholder. In London the owner of 
inscribed stock (government or municipal bonds) is inscribed 
on the books at designated places of registration. The own- 
er of inscribed stock sold on the London Stock Exchange 
has to be identified by a broker on the exchange or his clerk 
before the stock sold can be transferred. Such transfers, how- 
ever, are frequently carried out by means of a power of at- 
torney. 

IMP. As printed on the tape by the stock ticker these let- 
ters mean improvement, as improvement bonds. 

Imperial Bank of Germany. An institution in Berlin cor- 
responding in a general way to the Bank of England in 
London. It is commonly called the Reichsbank, which means 
Imperial Bank. 

The Imperial Bank of Germany has existed under its present 
name since January i, 1876, but it succeeded the Bank of 
Prussia, which was founded in 1765. Its shares are owned by 
individuals, but the institution is under the supervision of the 
government. The bank issues notes, but has no exclusive 
privilege, other banks also being permitted to issue notes. 

Implied contract. A contract which is implied or imposed 
by operation of law. 



SMITH'S FINANCIAL DICTIONARY. 247 

Importing countries. Countries producing less grain than 
is required for home consumption and relying on other coun- 
tries to supply the deficiency. The leading grain importing 
countries are Belgium, Brazil, China, Germany, Great Britain, 
France, Holland, Italy, Japan, Spain and the West Indies. 

Imports. Goods or any articles of trade or commerce 
brought into a country from another country. 

Import trade. Goods and other articles of commerce bought 
and brought from other countries ; another name is inward 
trade. 

Impost. A government tax or levy, especially a customs 
duty. 

Improvement bond. A bond issued for improvements ; 
usually of about the standing of a second mortgage bond, al- 
though in a permanent improvement it may represent a first 
lien. 

IN. As printed on the tape by the stock ticker these letters 
mean income, as income bonds. 

Inactive account. (Or slow account) ; an account to which 
debits and credits are not frequently added. 

An inactive account in a bank is one which is not frequently 
augmented by deposits and likewise is not frequently dimin- 
ished by drafts upon (by checks drawn against) it. 

An inactive speculative account (as in stocks, grain, cotton 
or cofifee, etc.) is one where the speculator does not buy and 
sell with frequency. 

Inactive stock. A stock little dealt in. An inactive stock 
may not continue inactive ; it may rouse into activity and then 
it becomes and is classed as an active stock. 

In and out. In speculation buying and then selling the 
same stock quickly, or the reverse, selling and then buying. 

In bond. Held under bond or in trust. 

Dutiable imported goods may be placed in a bonded ware- 
house. The owners file a bond to pay the duties when the 
goods are withdrawn from the warehouse. Domestic pro- 
ducts subject to the internal revenue tax may also be placed in 
bond under similar conditions. 

In case of need. This is an indorsement sometimes placed 



248 SMITH'S FINANCIAL DICTIONARY. 

on a bill of exchange naming a person who will pay it for the 
honor (credit) of the drawer (or an indorser) should the bill 
not be met (paid) at maturity by the drawee (the one who 
was to pay it). The usual form is "In case of need apply to 
A. B. (Signed) C. D.," meaning that if the bill is not paid 
A. B. will pay it for account of C. D. (the drawer or an in- 
dorser). Sometimes the indorsement is written simply "In 
need, with A. B. (Signed) C D." 

Inclearer. The name given to the clerk in a bank in Great 
Britain who receives at the clearing house items, (checks, 
drafts, etc.) to be collected from his bank and who makes a 
record of them and strikes the balance at the clearing house 
between the debits and credits of his bank. 

Also see Outclearer. 

Income. Revenue ; the amount of money coming to a per- 
son or a corporation (usually interpreted as meaning an- 
nually), whether as payment for services or as interest or 
other profit from investment. 

See Income table. 

Income account. Also called revenue account ; contains, in 
the case of a stock company, (i) gross earnings; (2) opera- 
ting expenses; (3) net income from all sources; (4) charges 
for interest, etc., and all charges before dividends ; (5) divi- 
dends and surplus. 

Income basis. The percentage of return from an invest- 
ment, as, for example, the percentage that the interest on a 
bond or the dividend on a stock equals when calculated on 
the cost of the bond or stock. 

A bond or stock paying 6 per cent which is bought at 120 
returns or yields 5 per cent ; therefore, this bond or stock at 
120 is on a 5 per cent income basis. 

The par or face value of most stocks is $100. There are 
many stocks, however, of the par or face value of $5, $10, $25 
and $50. Transactions in stocks are usually by percentage. 
A stock of the par value of $100 which is quoted at 75 is worth 
$75, or in other words, 75 cents on the dollar. A stock of the 
par value of $50 which is quoted at 75 is worth $37.50. To 



SMITH'S FINANCIAL DICTIONARY. 249 

find out the value of a stock in dollars multiply its face value 
by its percentage price, thus : 

Par or face $100 

Percentage price 75 

500 
700 

Value $7500 

Or, omitting ciphers, $75. 

Another example follows : 

Par or face $25 

Percentage price 57 

175 

125 

Value $1425 

Or, after the insertion of the decimal point, $14.25. 

Most bonds are in denominations of $1,000 or $500, but there 
are some in smaller denominations. There are United States 
bonds in denominations as small as $20. Transactions in 
bonds are by percentage the same as in stocks. To find the 
cost of a bond in dollars multiply the face value by its per- 
centage price, thus : 

Face value $1000 

Percentage price 97 

7000 
9000 

Cost $97000 

Or, omitting ciphers, $970. * 

Another example follows : 

Face value $500 

Percentage price 103 

1500 
500 
Cost '. $51500 

Or, omitting ciphers, $515. 



250 SMITH'S FINANCIAL DICTIONARY. 

To ascertain the return from an investment divide the rate 
of dividend or interest by the percentage price. An example 
follows where the price is 109 and the dividend or interest is 
6 per cent: 

109)6 (0055 
545 



550 

545 



5 
Omitting the ciphers and supplying the decimal point the 

return is shown to be 5.5 per cent and a fraction. 

See Income table. 

Income bond. A bond that is a lien on the net income 
(earnings) of a corporation ; it receives interest only when 
earned and is little better than preferred stock. All fixed 
charges and obligatory payments (including taxes) must be 
met before anything can be paid on an income bond, but it is 
entitled to interest up to a specified amount before a dividend 
can be paid on stock, either preferred or common. 

Income table. On succeeding pages is printed a table 
showing the rate per cent of income annually realized from 
stocks or bonds at different yearly rates of dividend or in- 
terest from I to 20 per cent, at purchase prices from 10 to 300 
per cent. To ascertain the rate per cent of income find the 
purchase price and follow the line of figures across to the 
column headed with the rate of dividend or interest. 



SMITH'S FINANCIAL DICTIONARY. 



25^ 



Purchase Price. 



[ per 
cent. 



lYi per 
cent. 



2 per 
cent. 



2>2 per 
cent. 



3 Per 
cent 



3I/2 per 
cent. 



10 

15 
20 
22 

24 



10 

5 

4-54 

4.16 



15 
10 

7-50 
6.81 
6.25 



20 

13-33 

10 
9.09 
8.33 



25 

16.66 

12.50 

11.36 

10.41 



30 
20 

15 

13-63 

12.50 



35 
23-33 

17-50 
15.90 

14-58 



26 
28 
30 

34 
36 
38 
40 
42 



3.84 

3-57 
3-33 
3.12 
2.94 



5-76 

5-35 
5 

4.68 
zi.41 



7.69 
7.14 
6.66 
6.25 
5-86 



9.61 
8.92 

8.33 
7.81 

7-35 



11.53 
10.71 
10 

9-37 
8.82 



13.46 
12.50 
11.66 
10.93 
10.29 



2.77 
2.63 
2.50 
2.38 

2.27 



4.16 
3-94 
3-75 
3-57 
3-40 



5.55 
5.26 

5 

4.76 

4-54 



6.94 

6.57 
6.25 

5-95 
5-68 



8.33 
7-89 
7-50 
7.14 
6.81 



9-72 
9.21 

8.75 
8.33 
7-95 



46 
48 
50 
51 

52 



2.17 


3-26 


2.08 


3-12 


2 


3 


1.96 


2.94 


1.92 


2.88 


1.88 


2.83 


1-85 


2.77 


1.81 


2.72 


1.78 


2.67 


1-75 


2.63 



4-34 
4.16 

4 

3-92 

3-84 



5-43 
5-20 

5 

4.90 

4.80 



6.52 

6.25 

6 

5.88 

5-76 



7.60 
7.29 

7 
6.86 

^•7Z 



53 
54 
55 
56 

57 



Z-77 
3-70 
3-63 
3-57 
3-50 



4-71 
4.62 

4-54 
4-46 
4-38 



5-66 

5.55 
5-45 
5-35 
5.26 



6.60 
6.48 
6.36 
6.23 
6.14 



58 

59 
60 
61 
62 



1.72 
1.69 
1.66 
1.63 
1.61 



2.58 

2.54 
2.50 

2.45 
2.41 



3-44 
3-38 
3-33 
3-27 
3.22 



4-31 
4-23 
4.16 
4.09 
4.03 



5-17 
5-08 

5 
4.91 

4-83 



6.03 
5-93 
5.83 
5-73 
5-64 



63 

64 
6c 

67^ 

68 

J59 
70 

71 
72 



1.58 
1-56 
1-53 
I-51 
1-49 



2.38 

2.34 
2.30 
2.27 
2.23 



3-17 
3.12 

3-07 
3-03 
2.98 



3-96 
3.90 
3-84 
3-78 
3-73 



4.76 
4-68 
4.61 
4-54 
4-47 



5.55 
5-46 
S-38 
5-30 

5-22 



1-47 
1-44 
1.42 
1.40 
1.38 



2.20 

2.17 
2.14 
2.11 
2.08 



2.94 
2.89 
2.85 
2.81 
2.77 



3-67 
3.62 

3-57 
3-52 
3-47 



4.41 

4-34 
4.28 
4.22 
4.16 



5.14 

5-07 

5 

4-92 

4.86 



73 
74 
75 
76 



1.36 
1-35 
1-33 
I-31 
1.29 



2.05 

2.02 

2 

1.97 

1-94 



2.73 
2.70 
2.66 
2.63 
2.59 



3-42 
3-37 
3.33 
3-28 

3-24 



4.10 

4-05 

4 

3-94 

3-89 



4-79 
4.72 
4.66 
4.60 
4.54 



78 
79 
80 
81 
82 



1.28 
1.26 

1-25 

1.23 
1.21 



1.92 
1.89 
1.87 
1.85 
1.82 



2.56 

2.53 
2.50 
2.46 
2.43 



3.20 
3.16 
3.12 
3-08 
3-04 



3-84 
3-79 
3-75 
3-70 
3-65 



4.48 
4-43 
4-37 
4-32 
4.26 



83 
84 
85 
86 

87 



1.20 
1. 19 
1. 17 
1. 16 
1. 14 



1.80 
1.78 
1.76 
1.74 
1.72 



2.40 
2.38 

2.35 
2.32 
2.29 



3-01 
2.97 
2.94 
2.90 
2.87 



3.61 

3-57 
3-52 
3-48 
3-44 



4.21 
4.16 
4.11 
4.06 
4.02 



89 
90 



I-I3 


1.70 


2.27 


1. 12 


1.68 


2.24 


I. II 


1.66 


2.22 



2.84 
2.80 

2.77 



3-40 

3-37 
3-33 



3-97 
3.93 
3.88 



252 



SMITH'S FINANCIAL DICTIONARY. 



Purchase Price. 



I per 
cent. 



Yz per 
cent. 



2 per 
cent. 



^Yz per 
cent. 



3 per 
cent. 



3>^ per 
cent. 



91 
92 

93 

94 
95 
96 

97 
98 

99 
100 

lOI 

102 
103 

104 

105 
106 
107 
108 
109 
no 

III 

112 

113 
114 

115 
116 
117 
118 
119 
120 

121 
122 
123 

124 
125 
130 

135 
140 

145 
150 

155 
160 

165 
170 

175 

180 

185 
190 

195 
200 

210 
220 
225 
230 
240 

250 

275 
300 



09 
08 
07 
06 

21 
04 

03 
02 
01 

99 

98 

97 

96 

95_ 

94 

93 

92 

91 
90^ 

90 

89 

88 

87 

§1 

86 

85 

84 

84 

83_ 

82 

81 

81 

80 

80^ 

76 
74 
71 
68 
66_ 

64 
62 
60 
58 

57. 

55 

54 

^2 

51 

52_ 

47 

45 

44 

43 

41 

40 

36 

33 



64 
62> 
61 

59 

57. 

56 

54 

53 

51 

52_ 

48 

47 

45 

44 
42^ 

41 
40 

38 
37 
36^ 

35 
33 
32 
31 

32_ 

29 

28 

27 
26 

^ 

23 

22 

21 

20 

20 

15" 
II 
07 
03 

96" 

93 
90 
88 

85. 

.83 

81 

78 

76 

75_ 

71 
68 
f6 

65 
62^ 

60 

54 
50 



2.19 
2.17 

2.15 
2.12 
2.10 

2.08 
2.06 
2.04 
2.02 
2 

[.96 
.94 
.92 
.90 



.85 
.83 
.81 

.80 
.78 

■77 

'7S 

73. 

.72 

.70 

.69 

.68 

.66 

.65 
.63 
.62 
.60 
.60 

•53 
.48 
.42 

■Z7 
■2,2, 
.29 

•25 
.21 

•17 
• 14 
.11 
.08 

•05 
.02 

^ 

.90 

.88 

.86 

:83_ 

.80 

•72 

.66 



2.74 
2.71 
2.68 
2.65 
2.63 
2.60 
2.57 
2.55 
2.52 

2.50 

2.47 
2.45 
2.42 
2.40 
2.38 

2.35 
2.33 
2.31 
2.29 

2.27 

2.25 
2.23 
2.21 
2.19 
2.17 

2.15 
2.13 
2.11 
2.10 
2.08 

2.06 
2.04 
2.03 
2.01 
2 

1.92 
1.85 
1.78 
1.72 
1.66 
1.61 
1.56 
I-5I 
1.47 
1.42 

T38" 
1-35 
I-3I 
1.28 

1-25 

1. 19 

1. 13 
I. II 
1.08 
1.04 

I 

.90 
.83 



3-29 
3.26 

3-22 

3.19 

3-15 
3.10 
309 
306 
303 
J 

2.97 
2.94 
2.91 
2.88 
2.85 

2.83 
2.80 
2.77 

2.75 
2.72 

2.70 
2.67 
2.65 
2.63 
2.60 

"2:58' 
2.56 

2.54 
2.52 
2.50 
2.47 
2.45 
2.43 
2.41 
2.40 

2.30 
2.22 
2.14 
2.06 
2 

1-93 
1.87 
1.81 
1.76 
I-7I 
\.66 
1.62 
1-57 
1.53 
1-50 
1.42 
1.36 
1.33 
1.30 
125 
1.20 
1.09 
I 



3.84 
3.80 

376 
372 
3-68 

3-64 
3.60 

3.57 
3-53 
350 
3-46 
3-43 
3.39 

3-33 
330 
3-27 
3-24 
3-21 
3-i8 

3-15 
3.12 

3-09 
3-07 
3-04 
3.01 

2.99 
2.96 
2.94 
2.91 

2.89 
2.86 
2.84 
2.82 
2.80 
2.69 

2.59 
2.50 
2.41 
2-33 
2.25 
2.18 
2.12 
2.05 
2 

1-94 
1.89 
1.84 
1.79 
175 
1.66 
1-59 
1-55 
1.52 
1-45 
1.40 
1.27 
1.16 



SMITH'S FINANCIAL DICTIONARY 



25s 



Purchase Price. 



4 per 
cent. 



4% per 
cent. 



5 per 
cent. 



5>^ per 
cent. 



6 per 
cent. 



6)4 per 
cent. 



10 

15 
20 
22 

24 



40 

26.66 

20 

18.18 

16.66 



45 

30 

22.50 

20.45 

1875 



50 

33-33 

25 

22.72 

20.83 



55 

36.66 

27.50 

25 
22.91 



60 
40 
30 
27.27 

25 



65 

43-33 

32.50 

29-54 
27.08 



26 
28 
30 

34 
Z6 
38 
40 

42 

44 



15-38 
14.28 

13-33 
12.50 
11.76 



17.30 
16.07 

15 
14.06 

13-23 



19.23 

17-85 
16.66 
15.62 
14.70 



21.15 
19.64 

18.33 
17.18 
16.17 



23.07 
21.42 
20 

18.75 
17.64 



25 

23.21 

21.66 

20.31 

19.11 



II. II 

10.52 

10 

9-52 

9.09 



12.50 

11.84 
11.25 
10.71 
10.22 



13-88 
13-15 
12.50 
11.90 
11.36 



15-27 
14-47 
13-75 
13.09 
12.50 



16.66 
15.78 
15 
14.28 

13.63 



18.05 
17.10 
16.25 
15-47 
14-77 



46 
48 
50 
51 

52 



8.69 

8.33 
8 

7.84 
7.60 



9.78 
9-37 
9 
8.82 

8.65 



10.86 

10.41 

10 

9.80 

9.61 



11-95 

11-45 

II 

10.78 

10.57 



13.04 

12.50 

12 

11.76 

11-53 



14-13 

13-54 

13 

12.74 

12.50 



53 
54 

5=; 

56 

57 



7-54 
7.40 
7.27 
7.14 
7.01 



8.49 
8.33 
8.18 
8.03 
7-89 



9-43 
9-25 
9-09 
8.92 

8.77 



10.37 

10.18 

10 

9.82 

9.64 



11.32 
II. II 
10.90 
10.70 
10.52 



12.26 
12.03 
11.81 
11.60 
11.40 



58 

59 
60 
61 
62 



6.89 
6.77 
6.66 
6.55 
6.45 



7-75 
7.62 

7-50 

7-37 
7-25 



8.62 
8.47 
8.33 
8.19 
8.06 



9-48 
9-32 
9.16 
9.01 
8.87 



10.34 
10.16 
10 

9-83 
9.67 



11.20 
1 1. 01 
10.83 
10.65 
10.48 



62, 
64 

65 

6S 

67_ 

68 

69 

70 

71 

72 

7Z 
7A- 
75 
76 

77 
78 

79 
80 
81 
82 

83 
84 

85 
86 

3l_ 
88 
8q 
90 



6.34 
6.25 

6.15 
6.06 

5-97 
5-88 
5-79 
5-71 
5-63 
5-55 

5-47 
S-40 
5-33 
5-26 

5-19 
5-12 
5.06 

5 

4-93 
4-87 
4.81 

4-76 
4.70 

4.65 
4.59 
4.54 
4-49 

4-44 



7.14 
7.03 
6.92 
6.81 
6.71 

~6£i 
6.52 
6.42 

6.33 
6.25 

6.16 

6.08 

6 

5-92 

5-84 

5-76 

5-69 

5.62 

5-55 
5-48 

5-42 
5-35 
5-29 
5-23 
5-17 

5-II 
5-05 

5 



7-93 
7.81 

7.69 

7-57 
7-46 

7-35 
7-24 
7.14 

7-04 
6.94 
6.84 

6.75 
6.66 

6.57 
6.49 
6.41 
6.32 
6.25 
6.17 
6.09 

6.02 

^•95 
5-88 
5.81 
5-74 
5-68 
5-61 
5-55 



8.73 
8.59 
8.46 

8.33 
8.20 

8.08 
7-97 
7-85 
7-74 
7-63 

7-53 
7-43 
7-33 
7-23 
7-14 

7-05 
6.96 
6.87 

6.79 
6.70 

"6:62~ 

6.54 
6.47 
6.39 

6.Z2 
6.25 
6.17 
6.11 



9-52 

9-37 

9-23 

9-09 

8.95 

8.82 

8.69 

8.57 

8.45 

8.33 

8.21 

8.10 

8 

7-89 

7-79 

7.69 

7-59 
7-50 
7-40 
7-2>'^ 
7.22 
7-14 
7-05 
6.97 
6.89 

6.81 

6.74 
6.66 



10.31 
10.15 
10 

9-84 
9-70 

9-55 
9.42 
9.28 

9-15 
9.02 

8.90 
8.78 
8.66 
8.55 
8-44 

8.33 
8.22 
8.12 
8.02 
7-92 

7.83 
7-7Z 
7-64 
7-55 
7-47 
7.38 
7.30 
7.22 



254 



SMITH'S FINANCIAL DICTIONARY. 



Purchase Price. 



4 per 
cent. 



4/^ per 
cent. 



5 per 
cent. 



SM per 
cent. 



6 per 
cent. 



6%. per 
cent. 



91 

92 

93 

94 
95 



4-39 
4-34 
4-30 
4-25 
4.21 



4.94 
4.89 
4.83 
478 
473 



5-49 
543 
5-37 
5-31 
5.26 



6.04 
5-97 
5.91 

5.85 
578 



6.59 
6.52 

6.45 
6.38 

6.31 



7.14 
7.06 
6.98 
6.91 
6.84 



96 
97 
98 

99 
100 



4.16 
4.12 
4.08 
4.04 
4 



4.68 
4-63 
4-59 
4-54 
4-50 



5-20 

5.15 
5.10 
5-05 

5 



572 
5-67 
5.61 
5-55 
5-50 



6.25 
6.18 
6.12 
6.06 
6 



6.77 
6.69 
6.63 
6.56 
6.50 



lOI 

102 
103 
104 
105 



3-96 
3-92 
3-88 

3-84 
3-8o 



4-45 
4.41 

4-36 
4-32 
4.28 



4-95 
4.90 

4.85 
4.80 

476 



5.44 
5-39 
5-33 
5-28 

5-23 



5-94 
5.88 
5-82 
576 
571 



6.43 
6.37 
6.31 
6.25 
6.19 



106 
107 
108 
109 
no 



377 
373 
370 
3.66 



4.24 
4.20 
4.16 
4.12 
4.09 



4.71 
4.67 
4.62 
4.58 
4-54 



5.18 
5-14 
5-09 
5-04 

5 



5-66 
5.60 

5-55 
5-50 
5-45 



6.13 
6.07 
6.01 
5-96 
590 



III 
112 

113 

114 

115 



3-6o 

3-57 
3-54 
3-50 

3-47 



4-05 
4.01 

3-98 
3-94 
3-91 



4-50 
4.46 
4.42 
4.38 
4-35 



4-95 
4.90 

4.86 
4.82 
478 



5-40 
5-35 
5-30 
S.26 

5-21 



5.85 
5-80 

575 
570 
5.65 



116 
117 
118 
119 
120 



3-44 
341 
3.38 
3-36 



3.S7 


4-31 


3.84 


4.27 


3.81 


4-23 


378 


4.20 


375 


4.16 



474 
4.70 
4.66 
4.62 
4.58 



5.17 
5-12 
5-o8 
5-04 

5 



5.60 

5-55 
5-50 
546 
541 



121 
122 
123 
124 
125 



3-30 
3-27 
3-25 
3.22 
3.20 



371 
3.68 

3-65 
3-62 
3.60 



4-13 
ZI..09 
4.06 
4-03 
4 



^•54 
4-50 
447 
443 
4.40 



4-95 
4.91 

4.87 

4-83 
4.80 



5-37 
5-32 
5.28 

5.24 
5.20 



130 

135 
140 

145 
150 



3-08 
2.96 
2.85 

275 
2.66 



346 

3-33 
3.21 
3.10 
3 



3.84 
370 
3-57 
3-44 
3-33 



4-23 
4.07 

3-92 
379 
3.06 



4.61 

4.44 
4.:28 

4-13 
4 



5 
4.81 

4.64 
448 
4-33 



155 
160 

165 
170 

175 



2.58 
2.50 
2.42 

2.35 
2.28 



2.90 
2.81 
2.72 
2.64 

2.57 



3.22 
3.12 

303 

2.94 
2.85 



3-54 
343 
3-33 
3-23 
3-14 



3.87 
375 
363 
3.52 
3-42 



4.19 
4.06 

3.93 
3-82 

371 



180 

185 
190 

195 
200 



2.22 
2.16 
2.10 
2.05 

2 



2.50 

243 
2.36 
2.30 

2.25 



2.77 
2.70 
2.63 
2.56 
2.50 



3-05 
2.97 
2.89 
2.82 

275 



3-33 
3-24 
3-15 
3-07 
3 



3.61 

3-51 
3-42 
3-33 
3-25 



210 
220 
225 
230 
240 



1.90 
1.81 
1.77 

173 
1.66 



2.14 

2.04 

2 

1.97 

1.87 



2.38 
2.27 
2.22 
2.17 
2.08 



2.61 
2.50 
2.44 
2.39 
2.29 



2.85 
2.72 
2.66 
2.60 
2.50 



309 
2.95 
2.88 
2.82 
2.70 



250 

275 
300 



1.60 
1.4^ 
1-33 



1.80 
1.63 
1.50 



2 

1.81 

1.66 



2.20 

2 

1.83 



2.40 
2.18 

2 



2.60 
2.36 
2.16 



SMITH'S FINANCIAL DICTIONARY. 



255 



Purchase Price. 



7 per 
cent. 



per cent. 



7Kper 
cent. 



8 per 
cent. 



8K per 
cent. 



9 per 
cent. 



10 

15 
20 
22 
24 
26 
28 
30 
32 

34 
36 
38 
40 
42 
44 
46 
48 
50 
51 
52 

53 
54 
55 
56 

57 
58 

59 
60 
61 

_62 

63 
64 
65 
66 

_67 
68 
69 
70 

71 

7^ 

7Z 
74 
75 
76 
77 
78 
79 
80 
81 

_82 

83 
84 
85 
86 

_87 
88 
89 
90 



70 
46.66 

35 

31.81 

29.16 



73 

48.66 

36.50 

33:18 

30.41 



75 

50 

37-50 

34-09 

31-25 



80 

53-33 
40 

33-33 



85 

56.66 
42.50 
38.63 

35-41 



90 
60 

45 
40.90 

37-50 



26.92 

25 

2Z.ZZ 

21.87 
20.58 



28.07 
26.07 

24-33 

22.81 

21.47 



28.84 
26.78 

25 

23-43 

22.05 



30.76 

28.57 
26.66 

25 
23-52 



32.69 

30.35 
28.33 
26.56 

25 



34-61 
32.14 
30 

28.12 

26.47 



19.44 

18.42 

17-50 
16.66 
15.90 



20.27 
19.21 

18.25 

17-38 

16.59 



20.83 
19-73 

18.75 
17-85 
17.04 



22.22 

21.05 
20 

19-04 
18.18 



23.61 
22.36 
21.25 
20.23 
19-31 



25 

23.68 

22.50 

21.42 

20.45 



15.21 

14-58 

14 

13-72 

13-46 



15-86 
15.20 
14.60 

14-31 
14.03 



16.30 
15.62 

15 
14.70 

14.42 



17-39 


18.47 


16.66 


17.70 


16 


17 


15.68 


16.66 


15-38 


16.34 



19.56 

18.75 
18 

17.64 
17.30 



13.20 
12.96 

12.72 

12.50 

12.27 



13-77 
13-51 
13-27 
1303 

12.80 



T4-i=; 
13-88 

13-63 

13-39 
13-15 



15.09 
14.81 

14-54 
14.28 
14.03 



16.03 
15-74 
15-45 
15-17 
14.91 



16.98 
16.66 
16.36 
16.07 
15-78 



12.06 
11.86 
11.66 
11.47 
11.29 



12.58 
12.37 
12.16 

11-95 

11.77 



12.93 
12.71 
12.50 
12.39 
12.09 



13-79 
13-55 
13-33 
13.11 
12.90 



14.65 
14.40 
14.16 

13-93 
13.70 



15-51 

15-25 

15 

14-75 

14-51 



II. II 
10.93 
10.76 
10.60 
10.44 



11.58 
11.40 
11.23 
11.06 
10.89 



11.90 
11.68 

11-53 
11.36 
II. 19. 



12.69 
12.50 
12.30 
12.12 
11.94 



13-49 
13-28 
13.07 
12.87 
12.68 



14.28 
14.06 
13-84 
13-63 
13-43 



10.29 
10.14 
10 

9-85 
9.72 



10.73 

10.57 
10.42 
10.28 
10.13 



11.02 
10.86 
10.71 
10.56 
10.41 



11.76 
11-59 
11-43 
11.26 
II. II 



12.50 
12.31 
12.14 
11.97 
11.80 



13-23 
13.04 

12.85 
12.67 
12.50 



9-58 
9-45 
9-33 
9.21 
9.09 



10 
9.86 

9-73 
9.60 

9.48 



10.27 

10.13 

10 

9.86 

9-74 



10.95 
10.80 
10.66 
10.52 
10.38 



11.63 
11.49 

11-33 
II. 18 
11.03 



12.32 

12.16 

12 

11.84 

11.68 



8.97 
8.86 

8.75 
8.64 
8.53 



9-35 
9-24 
9.12 
9.01 
8.90 



9.61 
9-49 
9-37 
9-25 
9.14 



10.25 

10.12 

10 

9-87 

9-75 



10.89 

10.75 
10.62 
10.49 
10.36 



11-53 
11-39 
II -25 
II. II 

10.97 



8.43 
8.33 
8.23 

8.13 
8.04 



8.79 
8.69 
8.58 
8.48 
8.39 



903 
8.92 
8.82 
8.72 
8.62 



9-63 
9-52 
9-41 
9-30 
9.19 



10.24 

lO.II 

10 
9.88 
9-77 



10.84 
10.71 
10.58 
10.46 
10.34 



7-94 

7.86 

7-77 



8.29 
8.20 
8.11 



8.52 
8.42 
8.33 



9-09 
8.98 
8.88 



965 
9-55 
9-44 



10.22 

lO.II 

10 



2^6 



SMITH'S FINANCIAL DICTIONARY. 



Purchase Price. 



7 per 
cent. 



7 3-IO 
per cent. 



7Kper 
cent. 



8 per 
cent. 



8j4 per 
cent. 



9 per 
cent. 



91 
92 

93 
94 
95 
96 

97 
98 

99 
100 

lOI 

102 
103 
104 
105 
106 
107 
108 
109 
no 

III 

112 
114 

116 
117 
118 
119 
120 

121 
122 
123 

124 

125 
130 

135 
140 

145 
150 

155 
160 
i6.q 
170 
175 
180 

i8s 
190 

195 
200 

210 
220 
225 
230 
240 

250 

275 
300 



7.69 
7.60 
7.52 
7-44 
7-3^ 



8.02 
7-93 
7.84 
7.76 
7.68 



8.24 

8.15 
8.06 

7-97 
7.89 



8.79 
8.69 
8.60 

8.51 
8.42 



9-34 
9-23 
9-13 
9.04 

8.94 



9.89 
9.78 
9.67 

9.57 
9.47 



7.29 
7.21 
7.14 
7.07 

7 



7.60 
7-52 
7.45 
7-37 
7.30 



7.81 
7-73 
7-65 
7-57 
7-50 



8.33 
8.24 
8.16 
8.08 
8 



8.85 
8.76 
8.67 
8.58 
8.50 



9-37 
9.27 
9.18 
9.09 
9 



6.93 
6.86 

6.79 
6.72 
6.66 



7.2.2. 

7-15 
7.08 
7.01 
6.95 



7.42 

7.35 
7.28 
7.21 
7.14 



7.92 

7.84 
7.76 
7.69 
7.61 



8.41 
8.33 
8.25 
8.17 
8.09 



8.91 
8.82 
8.73 
8.6s 
8.57 



6.60 
6.54 
6.48 
6.42 
6.36 



6.88 
6.82 

6.75 
6.69 
6.6z 



7.07 

•7 

6.94 
6.88 
6.81 



7.54 
7.47 
7.40 

7-33 

,7.27 



8.01 
7-94 
7.87 
7-79 

7.72 



8.49 
8.41 
8.33 
8.25 
8.18 



6.30 
6.25 
6.19 
6.14 
6.08 



6.57 
6.51 
6.46 
6.40 
6.34 



6.75 
6.69 
6.63 
6.57 
6.52 



7.20 
7.14 
7.07 
7.01 
6.95 



7.65 
7-58 
7.52 
745 
7.39 



8.10 
8.03 
7.96 
7.89 
7.82 



6.03 
5.98 
5-93 
5.88 

5.83 



6.29 
6.23 
6.18 

6.13 
6.08 



6.46 
6.41 

6.35 
6.30 
6.25 



6.89 
6.83 
6.77 
6.72 
6.66 



7-32 
7.26 
7.20 

7.14 
7.08 



7-75 
7.69 
7.62 
7-56 
7-50 



5-78 
5-73 
5-69 
5-65 
5.60 



6.03 
5.98 
5-93 
5-88 
5.80 



6.19 
6.14 
6.09 
6.04 
6 



6.61 

6.55 
6.50 

6.45 
6.40 



7.02 
6.96 
6.91 
6.85 
6.80 



7-43 
7-37 
7.31 
7-25 
7.20 



5-38 
5.18 

5 

4.82 

4.66 



5.61 

5-33 
5.21 

5-03 
4.86 



576 

5.55 
5-35 
5.17 
5 



6.15 
5-92 
5.71 
5-51 
5-33 



6.53 
6.29 
6.07 
5-86 
5.66 



6.92 
6.(£ 
6.42 
6.20 



4-51 
4-37 
4.24 
4.11 

4 



4.70 
4-56 
4-42 
4.29 
4.17 



4.83 
4.68 

4-54 
4.41 

4-23 



5.16 

5 

4.84 

4.70 

4-57 



548 

5-31 

5-15 

5 

4-85 



5-8o 
5-62 
545 
5-29 
5-14 



3-88 
378 
3-68 
3-58 
350 



4-05 
3-94 
3.84 
379 
3-65 



4.16 
4-05 
3-94 
3-84 
375 



4.44 
4-32 
4.21 
4.10 
4 



4.72 
4-59 
447 
4-35 
4-25 



5 
4.86 

473 
4.61 

4-50 



3-33 
3-18 
311 
3-04 
2.91 



347 
331 
324 
3-17 
3-04 



3-57 
340 
3-33 
3.26 
3.12 



3.80 
3-^3 
3-55 
347 
3-33 



4.04 
3-86 
377 
3-69 
3-54 



4.28 

4.09 

4 

391 

375 



2.80 
2.54 
2.33 



2.92 


3 


3.20 


2.65 


2.72 


2.90 


2.40 


2.50 


2.66 



340 

3-09 
2.83 



360 
3-^7 
3 



SMITH'S 


FINANCIAL DICTIONARY. 


257 




Purchase Price. 


9Kper 
cent. 


lo per 
cent. 


II per 
cent. 


12 per 
cent. 


15 per 
cent. 


2o per 
cent. 



10 

IS 

20 
22 

24 
26 
28 

30 

32 

34 
36 
38 
40 

42 

44 
46 
48 
50 
51 
_5^ 
53 
54 
55 
56 
57 
58 

59 
60 
61 

_62 

63 
64 

65 
66 

_67 

68 

69 
70 

71 

73 
74 
75 
76 
77 
78 
79 
80 
81 

83 
84 
85 
86 

37_ 

88 

89 
90 



95 

63-33 

47-50 

43.18 

39-58 



100 
66.66 
50 

45-45 
41.66 



no 
73-13 

55 
50 
45-83 



120 
80 
60 

54-54 
50 



150 
100 

75 

68.18 

62.50 



200 

133-33 

100 
90.90 
83-33 



36.53 
33-92 
31-66 
29.68 
27.94 



38.46 
35-71 
33-33 
31.25 
29.41 



4^.30 
39-28 
36.66 
34-37 
32.35 



46.15 

42.85 

40 

37.50 

35.29 



57.69 

53-57 

50 

46.87 

44.11 



76.92 
71.42 
66.66 
62.50 
58.82 



26.38 
25 

23-75 
22.61 

21.59 



27.77 
26.31 

25 

23.80 

22.72 



30.55 
28.94 
27,50 
26.19 
25 



33-33 

31-57 
30 

28.57 
27.27 



41.66 

39-47 
37.50 
35.71 
34-09 



55-55 

52.63 

50 

47.61 

45-45 



20.65 
9-79 
9 

8.62 
8.26 



21.73 

20.83 

20 

19.60 

19.23 



23.91 

22.91 

22 

21.56 

21.15 



26.08 

25 
24 

23-52 
23.07 



32.60 

31.25 
30 

29.41 
28.84 



43-47 

41.66 

40 

39-21 

38.46 



7-92 
7-59 
7-27 
6.96 
6.66 



18.86 
18.51 
18.18 
17-85 
17.54 



20.75 

20.37 

20 

19.64 

19.29 



22.64 
22.22 

21.81 
21.42 
21.05 



28.30 
27.77 
27.27 
26.78 
26.31 



37-73 
37.03 
36.36 

35-71 
35.08 



6.37 
6.10 

5.83 
5-57 
5-32 



17.24 

16.94 
16.66 
16.39 
16.12 



18.96 
18.64 

18.33 
18.03 
17-73 



20.68 

20.33 

20 

19.67 

19-35 



25.86 

25.42 

25 

24-59 

24.19 



34-48 
33-80 

33-33 
32.78 
32.25 



5-07 
4-84 
4.61 

4-39 
4.17 



15-87 
15.62 

15-38 

15-15 
14.92 



17.46 
17.18 
16.92 
16.66 
16.41 



19.04 

18.75 
18.46 
18.18 
17.91 



23.80 

23.43 
23.07 

22.72 
22.38 



31.74 
31.25 
30.76 
30.30 
29.85 



3.97 
3-76 
3-57 
3-38 
3-19 



14.70 
14.49 
14.28 
14.08 
13-89 



16.17 
15-94 
15-71 
15-49 
15-28 



17.64 

17-39 
17.14 
16.90 
16.66 



22.05 
21.73 
21.42 
21.12 
20.83 



29.41 
28.98 

28.57 
28.16 
27.77 



3-01 
2.83 
2.66 
2.50 
2.33 



13.69 
13.51 
13.33 
13.15 
12.98 



15.06 
14.86 
14.66 
14.47 
14.27 



16.43 

16.21 

16 

15-78 

15-58 



20.54 
20.27 
20 

19-73 
19.48 



27-39 
27.02 
26.65 
26.31 
25-97 



2.17 
2.02 
1.87 
1.72 
1.58 



12.82 
12.65 
12.50 
12.34 
12.19 



14.10 
13.92 

13-75 
13-58 
13-41 



15-38 
15-18 
15 
14.81 

14-63 



19.23 
18.98 
18.75 
18.51 
18.29 



25.64 
25-31 
25 
24.69 

24-39 



1-45 
1.30 

1. 17 
1.04 
0.91 



12.04 
11.90 
11.76 
11.62 
11.49 



13-25 
13.09 
12.94 
12.79 
12.64 



14-45 
14.28 
14. 1 1 
13-95 
13-79 



18.04 

17-85 
17.64 

17.44 
17.24 



24.09 
23.80 
23-52 
23-25 
22.98 



0.79 
0.67 

0.55 



11.36 
11.23 
II. II 



12.50 

12.35 
12.22 



13-63 
13-48 
13-33 



17.04 
16.85 
16.66 



22.72 
22.47 
22.22 



258 



SMITH'S FINANCIAL DICTIONARY. 



Purchase Price. 



gH per 
cent. 



lo per 
cent. 



II per 
cent. 



12 per 
cent. 



15 per 
cent. 



20 per 
cent. 



91 
92 

93 
94 
95 
96 
97 
98 

99 

100 

lOI 

102 
103 
104 
105 
106 
107 
108 
109 
no 
III 

112 
114 

116 
117 
118 
119 
120 

121 
122 
123 
124 

130 

135 
140 

160 

165 
170 

180 

185 
190 

195 
200 

210 
220 
225 
230 
240 

250 

275 
300 



10.44 
10.32 
10.21 
10.10 
10 



10.98 

10.86 

10.75 
10.63 
10.52 



2.08 

1-95 
1.82 
1.70 

1-57 



3-18 
3-04 
2.90 
2.76 
2.63 



16.48 
16.30 
16.12 

15-95 
15-78 



21.97 
21.73 
21.50 
21.27 
21.05 



9.89 

9-79 
9.69 

9-59 
9-50 



10.41 
10.30 
10.20 
10.10 
10 



1.46 

1-34 
1.22 
I. II 
I 



2.50 

2.37 
2.24 
2.12 
2 



15.72 
15.46 
15-30 
15-15 
15 • 



20.83 
20.61 
20.40 
20.20 
20 



9-40 

9-31 
9.22 

9-13 
9-04 



9.90 
9.80 
9-70 
9.61 
9-52 



0.89 
0.78 
0.67 

0.57 
0.47 



1.88 
1.76 
1.65 

1-53 
1.42 



14-85 
14.70 

14-56 
14.42 
14.28 



19.80 
19.60 
19.41 
19.23 
19.04 



8.96 
8.87 
8.79 
8.71 
8.63 



9-43 
9-34 
9-25 
9.17 
9.09 



0.37 
0.28 
0.18 
0.09 
o 



1.32 
1.21 
I. II 
I 
0.90 



14-15 
14.01 
13-88 
13.76 
13-63 



18.86 
18.69 
18.51 
18.34 
18.18 



8.55 
8.48 
8.40 

8.33 
8.26 



9 

8.92 

8.84 

8.77 
8.69 



9.90 
9.81 

9-73 
9.64 

9-56 



0.81 
0.71 
0.61 
0.52 
0.43 



13-51 
13.39 
13.27 

13-15 
13.04 



18.01 

17-85 
17.69 
17-54 
17-39 



8.18 
8.11 
8.05 
7.98 
7.91 



8.61 
8.54 
8.47 
8.40 

8.33 



9-48 
9.40 
9-32 

9-24 
9.16 



0.34 
0.25 
0.16 
0.08 
o 



12.93 
12.83 
12.71 
12.60 
12.50 



17.24 
17.09 
16.94 
16.80 
16.66 



7.85 
7-78 
7.72 
7.66 
7.60 



8.26 
8.19 
8a3 
8.06 



9-09 
9.01 

8.94 
8.87 
8.80 



9.91 

9-83 
9.76 
9.67 
9.60 



12.39 
12.29 
12.19 
12.09 
12 



16.52 

16.39 
16.26 
16.12 
16 



7-30 
7-03 
6.78 

6.55 
6.33 
6.12 

5.93 
5-75 
5.58 
5-42 

5-27 

5-13 

5 

4.87 

4-75 

4-52 

4-31 
4.22 

4-13 
390 
3-80 

3-45 
3.16 



7-69 
7.40 
7.14 
6.89 
6.66 

6.45 
6.25 
6.06 
5-88 
5-71 

5-55 
5-40 
5.26 

5-13 

_5 

4.76 

4-54 
,4.44 

4-34 
4.16 

4 

363 

3-33 



8.46 
8.14 
7.85 
7.58 
7-33 
7.09 
6.87 
6.66 

6.47 
6.28 

6.11 
5-94 
5-78 
5-64 
5-50 

5-23 

5 

4.88 

4.78 
4-58 

4-40 

4 

3-66 



9-23 

8.88 

8.57 

8.27 

_8 

7-74 
7-50 

7.27 

7-05 
6.85 

6.66 
6.48 
6.31 

6.15 
_6 

5.71 
5-45 
5-33 

5-21 

_5 

4.80 
4.36 
4 



11-53 
II. II 
10.71 
10.34 
10 

9-67 
9-37 
9.09 
8.82 
8.57 

8.33 
8.10 

7-89 
7.69 
7-50 

7-14 
6.81 
6.66 
6.52 
6.25 

6 

5-45 
5 



15.38 
14.81 
14.28 
13-79 
13.33 
12.90 
12.50 
12.12 
11.76 
11.42 

II. II 
10.81 
10.52 
10.25 
10 

9-52 
9-09 
8.88 
8.69 
8.33 



7.27 
6.66 



SMITH'S FINANCIAL DICTIONARY. 259 

Income tax. A tax levied upon the income or profits of an 
individual. Such a tax is levied in Great Britain. 

Inconvertible money. Money which is simply a promise to 
pay and without either gold or silver back of it into which it 
can be converted. 

Incorporation. In its business application incorporation is 
the procuring by a joint-stock company of the authority of the 
law to carry on business. See Articles of incorporation ; also 
see Charter. 

Indent. Name for an order sent abroad for goods, contain- 
ing particulars as to its execution, together with terms and 
conditions upon which it is given. 

Indenture. A contract under seal. 

Independent Treasury system. After the removal of the 
funds of the Federal government from the Bank of the United 
States in 1833 public moneys were deposited in selected state 
banks (called -'pet banks" by the opponents of the administra- 
tion). The results were entirely unsatisfactory. Large losses 
were suffered by the government and both political and busi- 
ness chaos followed. 

Finally, in 1840, an act was passed making the government 
the actual custodian of its own moneys. Vaults and safes 
were provided for the Treasury at Washington, Sub-Treas- 
uries were established in several of the larger cities and mints 
and branch mints were made places of deposit. The law 
was repealed in 1841 and reenacted in 1846. In the interim 
the funds were handled under the independent Treasury sys- 
tem without the authority of law. 

From 1846 the system was exclusively in operation until 
1863 when the national banking act was passed. This law did 
not change the principle of the system, which is still in opera- 
tion, but modified it to the extent that national banks could 
become depositories of public funds upon supplying United 
States bonds as security in the full amount of the money de- 
posited with them. 

The system has been entirely successful so far as safety is 
concerned, but the locking up of such large amounts of money 
as the government always keeps on hand has been a distinct 
economic loss and in times of monetary stringency an enor- 



26o SMITH'S FINANCIAL DICTIONARY. 

mous Treasury surplus has been an actual menace to the busi- 
ness of the country. 

India Council bill. A draft (bill of exchange) on (payable 
in) India issued by the India Council, the body or commis- 
sion which manages the business affairs of India in London. 

The revenues of India are collected in silver rupees (nomi- 
nally worth 2 shillings or 48.6 cents, but officially rated as 
worth 16 pence or 32.44 cents) ; but much of the expenditures 
of India, including the interest on its debt, has to be paid in 
sovereigns in Great Britain. The India Council, therefore, by 
means of Council bills exchanges some of its rupees in India 
for gold in London. On the other hand, merchants in Lon- 
don who import Indian products, for which they have to pay 
rupees in India, exchange their gold in London for rupees in 
India — that is, with their gold they buy India Council bills, 
which are payable in rupees in India. 

Remitters to India (those who have obligations to meet in 
India) are given an opportunity every Wednesday by the 
India Council to tender (bid) for Council bills. The bills are 
allotted (sold) to those who pay the highest prices for them. 
Some of the allotments are in telegraphic transfers, as distin- 
guished from bills-^that is, the Council orders by cable the 
immediate payment in India of these allotments. In allot- 
ment of bills the order for payment is forwarded by mail. 
Telegraphic transfers bring a fractionally higher price than 
bills. Special allotments are made at times other than the 
regular Wednesday meeting of the Council. 

India Council draft. Same as India Council bill; see India 
Council bill. 

India Council remittance. A bill of exchange or a tele- 
graphic transfer payable in India which is sold by the India 
Council. For information see India Council bill. 

India rupee paper. Designation for the promissory notes 
issued by the Indian government the interest on which is 
payable by drafts on India. When they bear on their face 
notification that interest (in the form of drafts on India) can 
be collected at the Bank of England they are termed enfaced 
paper. These drafts are readily bought by parties having re- 
mittances to make to India. 



SMITH'S FINANCIAL DICTIONARY. 261 

Indicator. Commonly called the ticker; the machine oper- 
ated by electricity which prints the quotations of stocks, grain, 
cotton, etc., on a paper tape. 

Also, an automatic apparatus by which prices are thrown 
into view is called an indicator. Such an apparatus is some- 
times used in reporting prices in grain and oil (petroleum) 
markets. 

Indirect exchange. Exchange between three or more places. 
For instance, a person in New York who desires to make 
a remittance to Chicago may find it advantageous to buy 
a draft (bill of exchange) on St. Louis and with this draft 
purchase in St. Louis a draft on Chicago. Again, a person in 
New York who desires to make a remittance to London may 
find it advantageous to buy a bill of exchange (draft) on 
Paris and with this bill purchase in Paris a bill on London. 
For additional information see Arbitration of exchange. 

Direct exchange is when only two places are involved; see 
Direct exchange. 

Indorsed bond. A coupon bond issued to bearer upon 
which has been placed an indorsement not properly pertain- 
ing to it must, according to New York Stock Exchange rules, 
be sold specifically as an indorsed bond and is not a delivery 
except as an indorsed bond. 

Any indorsement on a coupon bond stating that it has been 
deposited as security for bank circulation or for insurance re- 
quirement may be released by an acknowledgment of the re- 
lease before a notary public; it will then be a delivery in ac- 
cordance with New York Stock Exchange rules as a released 
indorsed bond. 

Sometimes the owner of a coupon bond inscribes the fact 
of his ownership on the bond, as, for instance, "This bond 
is the property of John Jones." In such a case in making a 
change in the ownership of the bond a formal assignment of it 
in blank must be executed by the owner and it then may be 
sold under the New York Stock Exchange rules specifically as 
a released indorsed bond. 

Indorsee. One to whom transfer by indorsement is made. 
For additional information see Indorsement. 



262 SMITH'S FINANCIAL DICTIONARY. 

Indorsement. A guarantee of payment of a promissory 
note, check, draft (bill of exchange), etc. 

In some cases, as where indorsed for collection, only the 
genuineness of the signature is guaranteed. When applied to 
negotiable instruments the term indorsement means an in- 
dorsement completed by delivery of the instrument. 

An indorser of a negotiable instrument contracts with the 
present holder or any future holder that if the maker does 
not pay it he (the indorser) will if it is duly protested for 
non-payment and notice of the protest is sent to the indorser. 

An indorser is wholly discharged if the instrument is not 
properly protested or if the security held for it is released or 
not properly protected or if the time for payment is extended 
without the indorser's assent or if the maker or any preced- 
ing indorser pays it after it is due. 

When an indorser writes above his indorsement (signature) 
''Protest waived" the necessity of protesting the instrument 
to hold the indorser is dispensed with. 

Indorsement must be on the paper so long as there is room 
on the back or front ; when there is no room it may be placed 
on a piece of paper, designated allonge, attached to the instru- 
ment. 

Indorsement of a negotiable instrument which is in the 
hands of another is evidence that the indorser has surrendered 
his ownership of it. 

Indorsers are liable to each other in the order in which their 
indorsements appear on the instrument (unless they have 
made a specific agreement to the contrary). In other words, 
each indorser is liable for the full amount of the instrument to 
any of the indorsers whose names are written under (fol- 
lowing) his ; but he is not liable to any indorser whose name is 
written above (preceding) his. The holder may proceed 
against any of the indorsers regardless of their liability as 
between themselves. 

A note or other negotiable instrument may be indorsed in 
nine different ways, each imposing a different liability on the 
indorser. 

An indorsement in full (i), another name for which is spe- 
cial indorsement, specifies by name the person in whose favor 



SMITH'S FINANCIAL DICTIONARY. 263 

it is made and to whom or to whose order the payment is to 
be made. 

An indorsement in blank (2) consists merely of the name 
of the indorser written on the back of the instrument. The 
receiver of a negotiable instrument indorsed in blank or any 
bona fide holder of it may wTite over it an indorsement in full 
to himself or to another or any contract consistent with the 
character of an indorsement, but he cannot enlarge the liability 
of the indorser in blank by writing over it a waiver of any of 
his rights, such as demand and notice. 

An absolute indorsement (3) binds the indorser to pay on 
no other condition than the failure of the prior parties to do 
so and on due notice to him of their failure. 

A conditional indorsement (4) contains some condition to 
the indorser's liability. 

An indorsement may be so Avorded as to restrict the further 
negotiability of the instrument ; it is then a restrictive in- 
dorsement (5). The words *'For collection" written on a 
note render the indorsement restrictive. The indorser in 
such a case may hold that he is not the owner of the note and 
-did not mean to give a title to it or to its proceeds when col- 
lected ; such an indorsement merely makes the indorsee agent 
for the indorser in collecting the note. 

A qualified indorsement or indorsement without recourse 
(6) consists in writing the words ''Without recourse to'' or "At 
the indorsee's own risk" on the back of the note ; the indorser 
is then a mere assignor of the title to the note and is relieved 
of responsibility for its payment. 

A joint indorsement (7) is an indorsement on a promissory 
note that is payable to two or more persons who are not part- 
ners. 

Successive indorsement (8) is made by several persons the 
legal efifect being to subject each of them to each other in the 
order in which they indorse; the indorsement imparts several 
and successive, but not joint obligation. 

Irregular indorsement (9) may originate in any of several 
ways. But in every case an indorser guarantees the genuine- 
ness of all preceding signatures. 

In order to hold the indorser of a check it should be presented 



264 SMITH'S FINANCIAL DICTIONARY. 

to the bank for collection the day it is received by the payee 
(the one to whom the amount of it is to be paid) — it must be 
presented the following day. In case the payee does not re- 
side in the place where is situated the bank upon which the 
check is drawn the payee must transmit it for collection not 
later than the hour for the closing of the last mail on the day 
following the day on which he received it. A bank receiving 
it for collection must forward it on the day of its receipt. To 
send it through various banks or through parties in various 
places constitutes negligence if the time of presentation is 
thereby delayed. 

When a maker of a promissory note is in default the in- 
dorser is absolved from responsibility for payment in case he 
wrote before his name at the time of the indorsement "Without 
recourse to." An indorser of a promissory note is exempt 
from liability if notice of its dishonor is not mailed to or 
served upon him within 24 hours of its non-payment. 

When a promissory note is discounted by a bank with 
which the maker has an account the amount of the note must 
be charged against the account, otherwise the indorsers, if 
there be any, are released from responsibility. 

Indorser. Properly and strictly an indorser is one who has 
put his name on the back of a piece of negotiable paper in 
order to transfer title from himself to another. Very com- 
monly, however, the word is used to include both this class of 
persons and also those who have put their names upon the 
paper as sureties. 

For additional informaton see Indorsement. 

Industrial. Pertaining to industry; processes or products 
of manufacture ; or commercial production generally. 

Industrial stock. The stock of a manufacturing company. 

In exchange. When the words ''in exchange" are appended 
to a draft the amount of the draft is to be paid in exchange on 
the place from which the draft emanates. 

For example, if a person in New York draws on a person in 
Chicago, the draft being payable in exchange on New York, 
the person in Chicago must pay the draft in exchange on New 
York; that is, he delivers in payment of the draft a bill of ex- 
change (which is a draft) payable in currency (money) in New 



SMITH'S FINANCIAL DICTIONARY. 265 

York. Such a bill of exchange he may purchase from a bank 
in Chicago and it will be paid by the bank in New York which 
is a correspondent of the bank in Chicago. 

It is the same when a promissory note is payable in ex- 
change. For example, a merchant in Chicago may purchase 
goods of a merchant in New York and give for them a note 
payable in exchange on New York. When the note matures 
(falls due) the merchant in Chicago pays it with a bill of ex- 
change on New York. 

Very few drafts and notes are made payable in exchange 
for the reason that the fact of making them so payable renders 
them non-negotiable instruments. 

In exchange is different from with exchange ; see With ex- 
change. 

Inflation bill. The name given to a bill passed by Congress 
in 1874 which provided for an increase of $44,000,000 in the 
issue of legal tender notes (United States notes, commonly 
called greenbacks). The bill also provided for the redemption 
of legal tender notes in gold coin or in government 5 per cent 
bonds and further provided that the notes when so redeemed 
might be reissued. Objection was raised that the constant 
reissue of legal tender notes and their conversion into bonds 
would increase the funded debt (bond issue) without retiring 
the notes. President Grant vetoed the bill. 

Initialed check. When a bank cashier or paying teller puts 
his initials on a check it signifies that the signature is cor- 
rect; but this initialing of a check is not a certification of it; 
nor is it in any sense an indorsement of it. 

Inland exchange. Same as domestic exchange ; see Domes- 
tic exchange. 

In liquidation. See Liquidation. 

In need. See In case of need. 

Inscribed stock. English term ; stock (government, colo- 
nial or municipal bonds) the name of the owner of which is in- 
scribed on the books at the designated places of registration. 
The owner of inscribed stock sold on the London Stock Ex- 
change has to be identified by a broker on the exchange or the 
broker's clerk. See Identification of a stockholder. 



266 SMITH'S FINANCIAL DICTIONARY. 

Insider. One who knows about the inside affairs of a cor- 
poration or about the secrets of a deal. 

In sight. This term is used to signify stocks (supplies) of 
grain, cotton, coffee or other commodities available for imme- 
diate use. 

Insolvent. The financial condition of one whose property 
is not sufficient to pay his debts. 

Inspection. When used as a trade term it means the inspec- 
tion and grading of grain or other commodities by individuals 
authorized to do so by law or such inspection and grading by 
exchanges or other commercial organizations. 

Instalment notes. A series of promissory notes, issued in 
discharge of a single obligation, which fall due (mature) at 
intervals. These are separate notes, but they accomplish pay- 
ment of the obligation by instalments. 

Insufficient funds. When a check is received by the bank 
upon which it is drawn and the drawer (issuer) has not suffi- 
cient funds to his credit with which to meet it the words "In- 
sufficient funds" are stamped or written on the check and the 
check is rejected. 

Interest. The charge for the use of money ; also the money 
so paid is designated as interest. The amount paid in regu- 
lar instalments to the holders of bonds is designated as inter- 
est, while the amount paid in regular instalments to the 
holders of stock is designated as dividend. 

On time loans interest is generally calculated on the basis 
of 30 days in a month and 360 days in a year. On call loans 
and on demand or sight paper interest is calculated on the 
basis of 365 days in a year. (On notes interest in New York 
state is calculated at 6 per cent in the absence of a special 
agreement). Interest on bonds is calculated on the basis of 
30 days in a month and 360 days in a year. 

In New York state the requirement that not more than 6 per 
cent interest shall be charged on money loaned does not apply 
to call loans. The law says : "Upon advances of money re- 
payable on demand to an amount not less than five thousand 
dollars made upon warehouse receipts, bills of lading, certifi- 
cates of stock, certificates of deposit, bills of exchange, bonds 
or other negotiable instruments, pledged as collateral security 



SMITH'S^ FINANCIAL DICTIONARY. 267 

for such repayment, any bank or individual banker may receive 
or contract to receive and collect as compensation for mak- 
ing such advances any sum to be agreed upon in writing by the 
parties to such transaction." 

It was formerly provided in New York state that, "for the 
purpose of calculating interest a month shall be considered 
as the twelfth part of a year and as consisting of thirty days ; 
and interest for any number of days less than a month shall 
be estimated by the proportion which such number of days 
shall bear to 30." Now, however, there is no definite provis- 
ion of law on the subject. Legally, a year contains as many 
days as there are in it, and legally, likewise, a month contains 
as many days as there are in it. Counting 30 days as a 
month and 12 months of 30 days each as a year is a matter of 
convenience ; and while such a basis of calculation might be 
disputed it seldom is. 

The date of payment of interest is the date on which the 
principal falls due unless a different time is expressly stated 
in the note or other obligation. 

The rule of the New York Stock Exchange is that for the 
time intervening between the sale of securities and their de- 
livery when transactions are regular way (delivery the day 
after sale) or at 3 (delivery at the end of three days) no in- 
terest is chargeable by one broker against the other; nor does 
either the buying or selling broker make a charge against his 
customer for interest. 

For longer contracts, however, as buyer (or seller) 4, 10,. 
20, 30 or 60, when receipt (or delivery) is not required until 
the end of the time specified (whatever it may be), interest 
is charged and is paid by the buyer if the purchase is made 
with the privilege accorded to him of not receiving and pay- 
ing for the securities for a period named ; or it is charged to 
and paid by the seller if the sale is made with the privilege 
accorded to him of not delivering the securities for a period 
named. Exceptions to the rule are contracts flat (without 
interest). 

On time contracts (contracts of longer duration than three 
days) the rate of interest charged, unless otherwise stipu- 



268 SMITH'S FINANCIAL DICTIONARY. 

lated, is 6 per cent, to be calculated by days. Accrued divi- 
dends on stocks and interest on bonds go to the buyer. 

In marginal transactions in stocks the practise as regards 
interest is illustrated by the following example: 

If a speculator buys loo shares of stock at lOO on lo per 
cent margin his broker receives the stock and pays $10,000 
for it to the broker from whom it was purchased. The buy- 
ing broker has received $1,000 from his customer and he ad- 
vances to the customer $9,000, holding the stock as security 
for the money so advanced. On the $9,000 he charges inter- 
est (usually 6 per cent). If the stock is sold later at no 
$11,000 is received for it. The gross profit is $1,000, but from 
this amount are deducted the broker's commission and the 
interest on the money advanced by the broker. 

Usually when a stock is sold short no interest has to be 
paid by the seller (the broker's customer). The broker who 
lends the stock pays interest on the money which is received 
for the stock from the borrowing broker and which is held 
pending the return of the stock. Even when the stock is 
lending flat no interest has to be paid by the seller for the rea- 
son that while, no interest is collected from the lender of the 
stock on the money advanced on it to him the value of it is col- 
lected from the one to whom the stock was sold and to whom 
the borrowed stock was delivered in fulfilment of the sale. 
One amount, accordingly, balances the other. When, however, 
the stock is lending at a premium (when not only no interest 
is paid by the lender of the stock, but a premium for its use 
is exacted by him from the borrowing broker) the speculator 
for whom it is borrowed to make delivery is charged with the 
amount of the premium. The actual owner of the stock is 
credited with the amount of the premium by his broker, who 
loaned the stock. 

See And interest; also see Compound interest; also see 
Income table. 

The term interest is frequently used in the sense of owner- 
ship, as, for instance, "the Jones interest in the Overland 
Railroad is large," meaning that Jones's ownership in the 
stock (or other securities of the road) is large; or the Jones 



SMITH'S FINANCIAL DICTIONARY. 269 

interest may refer to the ownership, not by Jones alone, but 
by Jones and associates. 

The term interest is commonly used in referring to specu- 
lative operations. For instance, the long interest in the stock 
market means the amount of stocks that has been bought 
and is held in expectation of an advance. The term ap- 
plies in the same way to an individual stock ; it means the total 
amount of the stock that has been bought and is held in expec- 
tation of an advance. On the other hand, the short interest 
means the amount of the stocks (or the stock) that has been 
sold short in expectation of a decline. 

Interest account. The interest account is the account in 
which are entered what is paid out as interest and what is re- 
ceived as interest. 

The interest account of an individual speculator is the 
charge against him made by the broker for interest on the 
difference between the margin furnished by him and the cost 
of the stocks or commodities (grain, cotton or coffee, etc.) 
bought for him while they are carried (held) for him. The in- 
terest account is an important consideration in the operations 
of a speculator. 

A broker usually charges his customers interest at the full 
legal rate (in New York state, 6 per cent), whereas, he is usu- 
ally able to borrow money at a materially lower rate for use 
in carrying his customers' stocks or commodities. The 
broker's interest account (as distinguished from the specula- 
tor's interest account) is, therefore, profitable to him. It is 
often the case that the profit in a broker's interest account 
defrays his office expenses. 

Interest-bearing. Bearing or paying interest. The bonds 
issued by the United States government, since the government 
pays interest on them, are interest-bearing obligations ; the 
money issued by the United States government, since the gov- 
ernment pays no interest on it, is a non-interest-bearing obli- 
gation. 

Interest-bearing debt. A debt upon which interest is paid. 

Interest on balance. The interest paid on the amount 
standing to the credit of a bank depositor at the end of each 
day (the interest generally being computed monthly). 



270 SMITH'S FINANCIAL DICTIONARY. 

Interest warrant. A warrant (or check) given in payment 
of interest, as, for instance, interest on a bond. 

Interim certificate. A temporary certificate, as, for in- 
stance, a certificate calling for and exchangeable for a speci- 
fied number of shares of stock not yet issued but to be issued. 

Interim dividend. Distribution of profit in advance — that 
is, before the books are made up and the final and full divi- 
dend for the year is declared. 

Interior movement of money. This term as used in New 
York means the movement or flow of money from New York 
to other domestic points (but not wholly interior points ; sea- 
board points are included) and the flow from other domestic 
points to New York. When it is said that the interior move- 
ment of money is in favor of New York it is meant that more 
money is coming to New York than is going from New York. 
Likewise, when it is said that the interior movement of money 
is against New York it is meant that more money is going 
from New York than is coming to New York. 

Internal commerce or trade. Home commerce or trade; 
commerce within the boundaries of a country. 

Internal revenue. Revenue derived from excise and license 
duties or taxes and special taxes on personal property. 

International check. A check drawn in one country and 
payable in any other country where the drawer has a corres- 
pondent. Such checks are sold by foreign exchange houses. 

International cheque. Same as international check; see 
International check. 

International money. Gold, the purchasing power of which 
is the same throughout the civilized world. 

International stock. Means in Wall Street an American 
stock which is dealt in on the London Stock Exchange as well 
as on the New York Stock Exchange. 

International trade. The exports and imports of a country. 

Interstate commerce law. An act of Congress (February 4, 
1887) for the regulation of commerce between the several 
states and establishing a special commission for the adminis- 
tration of the law. The law prohibits unjust discrimination in 
freight charges by means of special rates and prohibits the 



SMITH'S FINANCIAL DICTIONARY. 271 

pooling of freight (see Pool) by competing lines of transporta- 
tion. 

Into the bargain. In addition to what was agreed : thrown 
in for good measure ; besides. 

Inventory. A detailed schedule of merchandise or other 
property. 

Investment bill. A bill of exchange bought at a discount 
and held for the profit that will be realized when paid at its 
face (full amount) at maturity. 

Investment broker. One who buys or sells stocks and bonds 
outright and not on margin for others. 

Investment buying. Means in Wall Street buying of secu- 
rities by persons who intend to hold their purchases for divi- 
dends or interest or for appreciation in value. 

Investment securities. Securities purchased to be held per- 
manently, more especially to secure the interest and dividends 
which they pay. 

In ordering the purchase of securities on the New York 
Stock Exchange the practise is to deposit margin with the 
broker the same as in a speculative transaction. Then, the 
balance is paid to the broker when the securities are ready for 
delivery. In ordering by mail margin is sent. A demand 
draft is drawn by the broker on the purchaser for the balance 
and the securities are attached to the draft to be surrendered 
to the purchaser on the payment of the draft. The draft and 
securities may be sent through a bank, which will undertake 
the transmission of the securities and the collection of the 
draft, or it may be sent by an express company, which will do 
the work. 

In buying direct from a dealer, if the transaction is con- 
ducted in his office, it is a simple matter of purchase and pay- 
ment, although the payment must be in a manner satisfactory 
to the dealer — by certified check or cash. 

In selling through a broker securities that have been held 
for investment the practise is for the seller to deliver the secu- 
rities to the broker and take his receipt for them. Then, on the 
sale of the securities the broker will deliver his check for the 
amount realized from the securities. The receipt may be re- 



272 SMITH'S FINANCIAL DICTIONARY. 

turned, although this is not necessary. In selling to a dealer 
it is a simple matter of making a bargain with him. 

The best way of transmitting stocks or bonds to and from 
out-of-town points is by express. It is the rule for the out-of- 
town party to the transaction, whether he is buyer or seller, 
to pay the express charges as the expense would be avoided 
by his receipt or delivery of the securities in person or by rep- 
resentative. - The express charges are based on the value of the 
securities as marked on the outside of the package and the ex- 
press company is liable only to the extent of the marked value 
upon which charges are paid. A package of securities, there- 
fore, should be marked with the real value if it is desired to 
hold the express company responsible for the full value in case 
of the loss of the package. 

Unassigned registered bonds and unassigned stock may be 
sent by registered letter, but coupon bonds and stocks as- 
signed in blank, being liable to total loss, should be sent by 
express. 

Points to be considered in purchasing securities for invest- 
ment are that the principal and interest (or dividend) shall be 
assured ; that the income from the securities shall be satisfac- 
tory ; that the securities shall be readily salable ; and that the 
securities shall be available to pledge as collateral for loans 
in case it is desired to use them in that way. 

Also see Income basis. 

Investment speculation or speculative investment. Is when 
a person buys outright a stock or a bond, primarily to obtain 
the dividend or interest paid on it, but also with the intention 
of selling should there be a material advance in the price of 
the security. 

Likewise, the term applies when a person buys outright a 
stock that is not paying dividends, but which the buyer expects 
will in time pay dividends, with a resultant improvement in 
the price of the stock ; or the term applies when a person buys 
outright a bond that is not paying interest (as an income 
bond) , but which the buyer expects will in time pay interest, 
with a resultant improvement in the price of the bond. 

Investor. One who buys stocks and bonds to hold for divi- 
dends or interest or for appreciation in value; or one who buys 



SMITH'S FINANCIAL DICTIONARY. 273 

any property for the income it will bring or for an apprecia- 
tion in its value. 

Also see Investment securities. 

Invisible supply. A trade term for grain in the hands of 
farmers or others and not included in the statement of visible 
supply; see Visible supply. 

Invoice. A list of goods or materials sent to a purchaser, 
consignee or factor, together with prices and charges. 

Inward trade. Another name for import trade ; goods and 
other articles of trade bought and brought from other coun- 
tries. 

I O U. I owe you ; a written acknowledgment of debt ; a 
memorandum of an obligation. The letters I O U are followed 
by the amount of the indebtedness and then by the signature. 

When the I O U simply specifies the amount of the debt it 
is a mere acknowledgment of the obligation, but when to it is 
added a promise to pay at a certain future time it is a promis- 
sory note and is enforceable as such. 

I. p. These letters are sometimes used in stock market re- 
ports for instalment paid, as instalment on the purchase price 
or instalment of an assessment. 

Irish dividend. A facetious term used when an assessment 
is levied on a stock. 

Ironclad note. A name given to the form of note required 
by banks and other lenders of money from borrowers who 
furnish collateral security ; the correct name is collateral note ; 
see Collateral note. 

Irredeemable bond. "A bond which cannot be redeemed or 
paid off, but the interest on which goes on forever. There 
have been such stock (equivalent to bond) issues in Europe 
by municipalities, but they have now for the most part been 
bought up and canceled. 

Irredeemable currency. Paper money redeemable neither 
in gold nor silver; fiat money. United States notes (green- 
backs) are irredeemable currency for the reason that while 
they are received and paid for in gold by the United States 
Treasury they are not retired but are reissued. 

Irregular. Not according to requirements. 



274 SMITH'S FINANCIAL DICTIONARY. 

Also, the stock market is irregular when some stocks ad- 
vance and others decline in price. 

Irregular indorsement. Not in the usual manner. An irreg- 
ular indorsement may originate in any of several ways ; but 
in any case an indorser guarantees the genuineness of all pre- 
ceding signatures. 

Irrevocable assignment. An assignment that cannot be re- 
voked. Such an assignment is made in transferring title to 
stocks and bonds. 

Irrevocable power of attorney. A power of attorney that 
cannot be revoked ; such a power is given in assigning or 
transferring title to stocks and bonds. The blank or form 
used for a stock is commonly spoken of as a stock power and 
that for a bond as a bond power. 

On the London Stock Exchange the equivalent of an irrev- 
ocable power of attorney for stocks or bonds is a transfer 
deed. 

I. S. C. Abbreviation in railroad accounts for interstate 
commerce. 

Issue. When applied to negotiable instruments the term 
issue means the first delivery of the instrument complete in 
form to a person who takes it as a holder; when applied to 
securities the term means the outstanding stock or bonds of 
a company. 



SMITH'S FINANCIAL DICTIONARY. 275 



J 



Jay Cooke panic. So-called ; Jay Cooke & Co., a large bank- 
ing house in New York, failed September 18, 1873. A panic 
followed. The Union Trust Company stopped business tem- 
porarily (partly as a result of a defalcation of $500,000 by its 
secretary) ; the Bank of the Commonwealth closed its doors 
and never reopened them and numerous other financial con- 
cerns and stock brokers went down in the crash. 

At II o'clock on Saturday, September 20, the governing 
committee of the New York Stock Exchange ordered the 
exchange to be closed and it was not reopened until Septem- 
ber 30. 

The failure of Jay Cooke & Co. was brought about by the 
collapse of their effort to finance the Northern Pacific Rail- 
road, which was then in course of construction. 

The so-called Jay Cooke panic is also generally known as 
the panic of 1873. 

Jeweler's bar. A name given to a bar or ingot of fine (pure) 
gold of a size convenient for use in the fine arts. Jeweler's 
bars are of different sizes, containing from $100 to $600 worth 
of gold. A large size containing $5,000 worth is also made. 

Also see Export bar. 

Job. To buy in bulk from manufacturer or importer and 
sell in lots to dealers. 

Jobber. A member of the London Stock Exchange who 
deals between members of the exchange and not for outside 
principals or clients. He is practically a wholesale dealer in 
securities, buying as well as selling. He will either buy or 
sell at prices named by him. 

The jobbers make the market (establish the prices) in Lon- 
don, whereas in New York prices are established by the bids 
and offers of brokers. 

On the London Stock Exchange a broker is not a jobber; 
he is merely an agent who acts for another in buying from or 



276 SMITH'S FINANCIAL DICTIONARY. 

selling to a jobber. A broker in executing an order asks a 
jobber to "make a price" on the security in which he wishes 
to deal and the jobber, who does not know whether the broker 
is buyer or seller, names two prices, for instance, 99 3-8 and 
99 5-8, meaning that he will sell at the higher or buy at the 
lower price. If the broker has an order to buy he buys of the 
jobber at his (the jobber's) selling price or if he has an order 
to sell he sells to the jobber at his (the jobber's) buying price. 
The jobber expects to undo or cover the bargain at a profit by 
a fresh transaction with another jobber or broker. The jobber 
has prices for the account and other prices for money. See 
For the account ; also see For cash, under which title will be 
found the definition of for money. 

Another name for jobber is dealer, but its use is less frequent 
than jobber. 

The member of the New York Stock Exchange who corre- 
sponds in a measure to the jobber on the London Stock Ex- 
change is the room trader (sometimes called floor trader). 
He speculates on his own account and when he purchases a 
stock he tries at once or as soon as possible to sell it at a profit. 
Likewise, when he sells a stock short (sells stock which he 
does not own) he tries at once or as soon as possible to buy it 
back at a profit. He is not ready, as is the London jobber, to 
either buy or sell at prices named by himself, but he bids for 
(offers to buy) or offers (offers to sell) stock accordingly as 
he thinks he may be able to make a profit by probable subse- 
quent changes in the price. It is his purpose each day, if prac- 
ticable, to even up — to sell as many stocks as he has bought 
or to buy as many stocks as he has sold. 

In trade a jobber is one who buys goods in bulk from the 
importer and manufacturer and sells to the retailer. 

Jobber's turn. London Stock Exchange term ; the jobber's 
profit as represented by the difference between the price at 
vvhich a jobber buys from or sells to a broker and the middle 
price at which he covers his bargain (that is, when he 
covers at the middle price, as he often does). Thus, if his 
prices are 99 7-8 — 100 1-8 and he sells to a broker at 100 1-8 
and undoes or covers the bargain by buying from another job- 
ber at 100 his turn is 1-8. But if he buys from another broker 



SMITH'S FINANCIAL DICTIONARY. 277 

at 99 7-8 he makes two turns. It is not often, however, that 
he is fortunate enough to deal between two brokers ; more fre- 
quently he ''takes his turn" by covering his bargain with 
another jobber at the middle price. 

Job lot. A lot of goods, miscellaneous in kind and quality, 
sold cheap. 

Joint account. When two or more speculators join in a 
transaction for their mutual benefit or risk they are in joint 
account. 

Joint adventure. Same as joint account, but a term that is 
little used. 

Joint and several note. A note signed by two or more par- 
ties in which it is specified that they are jointly and severally 
responsible for the payment of it. 

Joint bond. A bond for the payment of the principal and 
interest on which tv/o (or more) parties are jointly bound. 
Such a bond is not uncommon in railroad issues. Two rail- 
roads may jointly guarantee both principal and interest on 
bonds issued to acquire a third railroad which is to be owned 
by the first two in common. 

Joint indorsement. An indorsement on a promissory note 
that is payable to two or more persons who are not partners. 

Joint mortgage. A mortgage executed jointly by two or 
more parties. For additional information see Joint bond. 

Joint note. A note signed by two or more parties. 

Joint-stock company. A company whose capital stock is 
divided into shares of equal amount is a joint-stock company. 
For additional information see Company. 

Judgment creditor. A creditor whose claim has been re- 
duced to a judgment against his debtor. 

Judgment debt. A debt found due and awarded by decision 
of a court. 

Judgment debtor. A debtor against whom his creditor has 
recovered (obtained) a judgment of record — that is, a judg- 
ment which has been placed on record. 

Judgment note. A promissory note coupled with a warrant 
of attorney authorizing the entry of a judgment without pro- 
cess against the maker in case of non-payment. 

Jungle or jungle market. A colloquial name for the depart- 



27S, SMITH'S FINANCIAL DICTIONARY. 

ment of the London Stock Exchange in which West African 
shares (stocks) are dealt in. 

Junk. A colloquialism for worthless securities ; same as 
cats and dogs. 



K 



Kaffir circus. A colloquial name for the group of jobbers 
on the London Stock Exchange who operate in South African 
stocks ; the term also applies to the place where they congre- 
gate. 

Kaffirs. London Stock Exchange name for the shares 
(stocks) of the South African mining, land and other com- 
panies. 

Kangaroos. London Stock Exchange name for the shares 
(stocks) of West Australian mining, land and other compa- 
nies ; another name is Westralians. 

Killing. A colloquialism ; when a speculator has made an 
unusually large profit he is said to have made a killing. A 
killing may be made in a single stock or in the general market, 
that is, in several stocks. Likewise, a killing may be made in 
grain, cotton, coffee or any other speculative commodity. 

Kilo. A term used in the grain trade as an abbreviation for 
kilogram. Quotations from Antwerp are per loo kilos, equal 
to 3.67 bushels; quotations from Berlin are per 1,000 kilos, 
equal to 36.74 bushels. 

Kite. A name sometimes applied to an accommodation bill 
(draft or acceptance). For additional information see Accom- 
modation paper. 

Kiting. Consists of incurring a fresh obligation to dis- 
charge an old one. 

The commonest form of kiting is by means of checks. Ex- 
ample : A depositor in a bank has issued a check which over- 
draws his account. He makes out another check, obtains 
cash for it elsewhere than at the bank, and deposits the cash 



SMITH'S FINANCIAL DICTIONARY. 279 

in the bank in time to meet the first check. Two or three days 
elapse before the second check reaches the bank and before 
its arrival another check has been made out and the cash 
obtained for it and deposited. So the process continues. 

A person engaged in kiting may arrange to exchange checks 
with another person. Thus, if he has issued a check which 
overdraws his account he makes out a new check and ex- 
changes it for a check drawn by the other person on another 
bank, which latter check he (the first person) deposits in his 
own bank to meet his own first check. He may draw and ex- 
change a third check to meet his second check ; and so on. 

The person engaged in kiting may gain time by sending 
his checks to other places — places as remote from the one in 
which is situated his bank as possible. The more remote the 
places the longer the checks are in reaching the bank upon 
which they are drawn for payment. 

Another example of kiting : A person in New York has 
issued a check which overdraws his account. He draws 
(draws a draft) on another person in Chicago (in accordance 
with a previous arrangement made with this second person) 
and deposits the draft in his own bank to meet the check 
Avhich overdraws his account. Then, he sends another check 
of his own to the person in Chicago upon whom he has drawn. 
This check is used in Chicago in meeting (paying) the draft 
on its arrival there. This check on arrival in New York is 
met with another draft ; and so on. 

Again, three or more persons and three or more places 
may be involved in a kiting operation. A in New York may 
draw on B in San Francisco, B in San Francisco may draw on 
C in St. Louis and finally C in St. Louis may draw on A in 
New York. Ten days or more will elapse between the time 
when A draws on B and the time when C's draft on A reaches 
New York. In the meantime A will have the use of the money 
obtained on his draft on B and just before the arrival in New 
York of C's draft on A A will have drawn a new draft; and so 
the process may continue. 

Another form of kiting is for a person to obtain an accom- 
modation note from another person for, say, 60 days and 
have it discounted at his bank. The amount is credited to the 



28o SMITH'S FINANCIAL DICTIONARY. 

account of the person who procures the discounting of the 
note and he may draw checks against it. When the note 
reaches maturity (becomes due) a second note may be used to 
take up the first. 

Knocked down. A colloquialism employed at an auction 
sale. When the highest price obtainable for the property has 
been reached the auctioneer brings down his hammer or gavel 
and the property is said to have been knocked down, or in 
other words, sold at that price. 



L 



Lake-and-rail. Said of freight transportation partly by lake 
and partly by rail. 

Lakh. One hundred thousand; a lakh of rupees is 100,000 
rupees. 

Lamb. A Wall Street name applied to one inexperienced in 
operations in stocks; a beginner in speculation (in other 
words, an outsider or countryman). 

Lame duck. Wall Street term for a speculator who is tem- 
porarily unable to meet his engagements. 

Land grant. A grant of land by the government. The rail- 
roads crossing the Western plains received large grants of 
lands from the government to aid in their construction. 

Land grant bond. A bond issued under a land grant mort- 
gage. 

Land grant mortgage. A mortgage on a grant of land by 
the Federal or a state government under which bonds are is- 
sued. 

Large bond. The name applied to a bond for a larger 
amount than $1,000. Small bond is the name applied to a 
bond for a smaller amount than $500. The usual amount of a 
bond is $1,000. 

Last board. On exchanges where there are calls of stocks 
and bonds or calls of grain, cotton, etc., the last call is often 



SMITH'S FINANCIAL DICTIONARY. 281 

designated as the last board. Also, the last printed list of 
sales on the New York Stock Exchange, covering the period 
from 2 to 3 p. m., is called the last board. 

Latin Union, The. A monetary union formed by the adop- 
tion of the same currency system by Belgium, France, Greece, 
Italy and Switzerland. See Moneys of the world. 

Lawful money. The term lawful money is understood to 
apply to every form of money endowed by law with legal ten- 
der quality; see Legal tender. 

Law merchant. The body of commercial usages or rules 
recognized by civilized nations as regulating the rights of 
persons engaged in trade. 

Laying in balance. Depositing as a security or pledge. 

Lazy weight. Scant weight. 

Leased line. A railroad leased to another railroad ; the in- 
terest and dividends on its securities are (usually) paid by 
the railroad to which it is leased. 

Ledger. The principal book of accounts in which all trans- 
actions of each day are entered imder appropriate heads so as 
to show the debits and credits of each account. 

Leeman's act. English term ; an act of Parliament by which 
a seller of bank shares must at the time of sale state the num- 
bers of the shares that he is selling. The act was passed to 
prevent bear sales of bank shares. 

Legal debt. One that is enforceable in a court of law. 

Legal holiday. A day appointed by law to be kept as a holi- 
day. 

Contracts falling due on a legal holiday are settled on the 
preceding day. Where two holidays occur on consecutive 
days contracts falling due on the second of the holidays are 
settled on the succeeding day. 

Stocks sold on Friday on the New York Stock Exchange in 
the regular way (deliverable the next day) are not required to 
be delivered until Monday, Saturday being a half-holiday. 
The return of money loaned on call on Friday cannot be de- 
manded until Monday. Time contracts falling due on Satur- 
day are settled on Friday and those falling due on Sunday 
are settled on Monday (or the next business day if Monday 
is a holiday). 



282 SMITH'S FINANCIAL DICTIONARY. 

Legal minimum reserve. The minimum reserve required 
by law to be held by a bank against deposits. See Bank re- 
serve. 

Legal requirement. As appHed to the reserve of a bank 
legal requirement means the amount in lawful money required 
by law to be held against deposits. 

Legal reserve. The amount in lawful money required by 
law to be held against deposits. 

Legal tender. The following statement concerning the legal 
tender properties of money of the United States is based upon 
United States Revised Statutes, sections 3585, 3586, 3587, 3588, 
3589, 3590 and the acts amendatory thereof and additional 
thereto : 

Gold coin, standard silver dollars, subsidiary silver, minor 
coins. United States notes (greenbacks) and Treasury notes 
of 1890 have the legal tender quality as follows : Gold coin is 
legal tender for its nominal value when not below the limit of 
tolerance in weight ; when below that limit it is legal tender in 
proportion to its weight ; standard silver dollars and Treasury 
notes of 1890 are legal tender for all debts, public and private, 
except where otherwise expressly stipulated in the contract;, 
subsidiary silver is legal tender to the extent of $10, minor 
coins to the extent of 25 cents and United States notes for all 
debts, public and private, except duties on imports and inter- 
est on the public debt. Gold certificates, silver certificates and 
national bank notes are non-legal tender money. Both kinds 
of certificates, however, are receivable for all public dues and 
national bank notes are receivable for all public dues except 
duties on imports and may be paid out for all public dues ex- 
cept interest on the public debt. 

The term lawful money is understood to apply to every form 
of money which is endowed by law with the legal tender qual- 
ity. 

Following is a compilation by the Treasury Department 
showing what forms of money are legal tender and what forms 
are not legal tender : 

LEGAL TENDER. 

Gold coins. — The gold coins of the United States are a legal tender in 
all payments at their nominal value when not below the standard weight 
and limit of tolerance provided by law for the single piece, and, when re- 



SMITH'S FINANCIAL DICTIONARY. 283 

duced in weight below such standard and tolerance, are a legal tender at 
valuation in proportion to their actual weight. 

Standard silver dollars are a legal tender at their nominal value for all 
debts and dues, public and private, except where otherwise expressly 
stipulated in the contract. 

Subsidiary silver coin. — The silver coins of the United States of 
smaller denominations than one dollar are a legal tender in all sums not 
exceeding ten dollars, in full payment of all dues, public and private. 

Minor coin (coins of copper, bronze, or copper-nickel). — Minor coins 
are a legal tender at their nominal value for any amount not exceeding 
twenty-five cents in any one payment. 

United States notes (known as legal tender notes, or "greenbacks"). — 
They are a legal tender in payment of all debts, public and private, within 
the United States, except duties on imports and interest on the public debt. 

Demand Treasury notes authorized by the act of July 17, 1861, and 
the act of February 12, 1862, are lawful money and a legal tender in 
like manner as United States notes. 

One and two-year notes of 1863. — These notes, redeemable one year 
from date and two years from date, bearing interest at five per centum 
per annum, are a legal tender for their face value, exclusive of interest. 

Compound interest notes. — These notes were payable at any time after 
three years from date, and bearing interest not exceeding seven and three- 
tenths per centum, payable in lawful money at maturity, or, at the dis- 
cretion of the Secretary of the Treasury, semi-annually; and such of them 
as should be made payable, principal and interest, at maturity, to be a legal 
tender to the same extent as United States notes for their face value, exclud- 
ing interest. 

Treasury notes of 1890 are a legal tender in payment of all debts, pub- 
lic and private, except where otherwise expressly stipulated in the con- 
tract, and are receivable for customs, taxes, and all public dues- 

Columbian half-dollars are a legal tender to the same extent as sub- 
sidiary silver coin, i. e. ten dollars in any one payment. 

Columbian quarters are a legal tender to the same extent as subsidiary 
coin, i. e. ten dollars in any one payment. 

NOT LEGAL TENDER. 

Gold certificates are not a legal tender. They are receivable for 
customs, taxes, and all public dues. 

Silver certificates are not a legal tender. They are receivable for cus- 
toms, taxes, and all public dues. 

National bank notes are not a legal tender. They are receivable at par 
in all parts of the United States in payment of taxes, excises, public lands, 
and all other dues to the United States, except duties on imports ; and also 
for all salaries and other debts and demands owing by the United States 
to individuals, corporations, and associations within the United States, 
except interest on the public debt, and in redemption of the national cur- 
rency. 

Trade dollars are not a legal tender- By the act of February 12, 1873, 



284 SMITH'S FINANCIAL DICTIONARY. 

they were a legal tender at their nominal value for any amount not 
exceeding five dollars in any one payment, but under date of July 22, 
1876, it was enacted that the trade dollar should not thereafter be a 
legal tender. 

Fractional currency is not a legal tender. [Note: It was receivable 
for postage and revenue stamps, and also in payment of any dues to the 
United States less than five dollars, except duties on imports]. 

Foreign gold coins are not a legal tender in payment of debts. 

Foreign silver coins are not a legal tender in payment, of debts. 

Continental currency. — The question has been raised and disputed 
as to whether what was called the "Continental currency," issued during the 
War of the Revolution by the old government, was or was not legal tender. 
The facts appear to be that while the Continental Congress did not by 
any ordinance attempt to give it that character, it asked the States to 
do so, and all seem to have complied except Rhode Island. The Con- 
tinental Congress only enacted that the man who refused to take the 
money should be deemed an enemy of his country. — "The National 

Loans," by Rafael A. Bayley, of the Treasury Department; prepared for 
the tenth census. 

The Constitution prohibits the several states from making 
anything but gold and silver coin a legal tender in payment of 
debts. 

Where a contract stipulates for payment in coin the debtor 
is not privileged to make payment in paper money or in any 
currency other than that specified in the contract. 

Legal tender certificate. Same as currency certificate ; for 
information see Currency certificate. 

Legal tender note. Another name for United States note; 
see United States note. 

Legal tender power. The power possessed by money, as 
confirmed by law, to discharge indebtedness. 

Lending stocks. See Borrowing and lending stocks. 

Letter head. The printed heading of a sheet of letter-paper ; 
or the sheet bearing such a heading. 

Letter of advice. A letter giving special information, as 
from a consignor to a consignee or from an agent to a princi- 
pal or from drawer to drawee of a bill of exchange. The term 
is often abbreviated to advice. 

In the foreign exchange business it is the practise for the 
seller of a bill of exchange to send a letter of advice to the 
drawee (the one upon whom the bill is drawn). This letter 
of advice constitutes notice to the drawee that the bill of ex- 



SMITH'S FINANCIAL DICTIONARY. 285 

change in question has been issued and it may contain other 
information or instructions. 

Letter of allotment. A letter informing an applicant for se- 
curities of a new company (or new securities of an existing 
company) of the amount allotted to him. 

Letter of credit. See Circular letter of credit ; see Commer- 
cial letter of credit. 

Letter of delegation. A letter conferring authority on an- 
other to collect an amount due. 

For instance, a merchant in New York may have shipped 
goods to a merchant in Chicago. The New York merchant 
authorizes (delegates) a bank in New York to collect pay- 
ment for the goods and confers the authority to do so in a let- 
ter of delegation, so-called, which is accompanied by the 
bill of lading. The bank in New York forwards the letter and 
bill of lading to the bank in Chicago which acts as its corre- 
spondent there and which makes the collection. 

Again, a merchant in New York may have shipped goods to 
a merchant in London. The New York merchant authorizes 
(delegates) a dealer in foreign exchange in New York to col- 
lect payment for the goods and confers the authority to do so 
in a letter of delegation, which is accompanied by the bill of 
lading, policy of insurance, etc. The dealer in exchange trans- 
fers the letter with the bill of lading, etc., to his correspondent 
in London who makes the collection. 

Letter of indication. The letter of identification given by a 
dealer in exchange to the purchaser of a traveler's letter of 
credit (circular letter of credit) or to the purchaser of circular 
notes. For additional information see Circular letter of credit ; 
also see Circular note. 

Letter of license. A document by which creditors agree to 
permit a debtor to continue business or to pay in such amounts 
or at such times as are therein specified. 

Also see Bank act. 

Letter of regret. A letter sent to a subscriber for new se- 
curities intimating that none of the amount applied for has 
been allotted to him. 

Letter press. A press used in making copies of business 
letters. 



286 SMITH'S FINANCIAL DICTIONARY. 

Levy. A name applied in the Southern and Western states 
to the old Spanish real, or its equivalent, 12 1-2 cents. 

Liabilities. Obligations ; debts. 

Liability. Responsibility for loss or damage ; an obligation. 

For the liability of an agent (or broker) see Agent. 

Liability of an acceptor. For information see Acceptance. 

Liability of an indorser. For information see Indorsement. 

Lien. A legal claim or hold on property as security for a 
debt or a charge. A mortgage is a lien. 

Lienor. The holder of a lien. 

Limit. A Wall Street term for an order from a client to a 
broker to buy for him not above a certain price or limit or to 
sell for him not below a certain price or limit. 

Also see Stop order. 

Limitation. The length of the period in which the right ex- 
ists to institute legal proceedings to enforce the collection of a 
debt. The length of this period varies in the different states. 
When the period has elapsed the debt is said to have been out- 
lawed. 

Limited legal tender. Subsidiary silver coins (coins of de- 
nominations less than $1) and minor coins (the 5-cent nickel 
and the i-cent bronze) are limited legal tender. Subsidiary 
silver coins are legal tender only ta the amount of $10 and 
minor coins are legal tender only to the amount of 25 cents. 

For additional information see Legal tender. 

Limited liability. Corporations in certain states may em- 
ploy the word ''Limited" in their title, thus signifying that 
their stockholders are exempted from personal liability under 
the law. "Limited" corporations are more common in Eng- 
land than in the United States. 

Limited liability company. One in which stockholders are 
individually limited in their liability for the company's debts 
to the amount of stock that they hold ; in other words they can 
lose only what they have paid for their stock. 

Limited order. In stocks, an order where stock is to be 
bought below or at a price named ; or where the stock is to be 
sold above or at the price named. 

Limited partnersnip. A partnership consisting of general 
and special partners, the general partners managing the busi- 



SMITH'S FINANCIAL DICTIONARY. 287 

ness and the special partners contributing capital with liability 
limited to the capital so contributed. 

Limit to cut loss. London Stock Exchange term which 
means the same as the New York Exchange term stop-loss Ol- 
der. For additional information see Stop order. 

Limping standard. This term is applied to the monetary 
system of a country which originally maintained the double 
standard, but which has suspended the free coinage of silver 
without definitely adopting the gold standard. France is such 
a country. According to its monetary laws it still is a double 
standard country, but the gold standard is actually in use. Its 
mints are now open to the free coinage of gold only and the 
silver in circulation instead of passing at its bullion value cir- 
culates, by reason of the restricted coinage of it, at the value of 
gold. It is the gold standard with a "limp." 

Line. The word line is often used as a synonym for rail- 
road. For instance, the Pennsylvania Railroad is not infr.^- 
quently spoken of as the Pennsylvania line. 

Also, line is sometimes used to designate a particular issue of 
bonds, as main line bonds, meaning bonds issued under a mort- 
gage on the main line (of a railroad) ; or, branch line bonds, 
meaning bonds issued under a mortgage on a branch line of a 
railroad. 

Line of deposit. The average amount in a given period to 
the credit of a depositor in a bank. 

Line of discount. The average amount of a dealer's dis- 
counts or loans from a bank ;.. the average amount of credit 
which a bank extends to a depositor. 

Line of stocks (or of grain, cotton, coffee, etc). A specu- 
lator is said to have a line of stocks when he is long or 
short of several stocks ; the term line more particularly applies 
when the stocks have been bought or sold short systematic- 
ally, as on a scale (see On a scale) ; or in anticipation of an ad- 
vance or decline in which all will participate simultaneously. 

Likewise, a speculator is said to have a line of grain or of 
cotton, coffee, etc., when he has bought or sold for future de- 
livery in various months and at varying prices. 

Liquid assets. Practically the same as quick assets ; assets 
in cash or readilv convertible into cash. The assets of a bank, 



288 SMITH'S FINANCIAL DICTIONARY. 

for instance, are liquid assets when they are not tied up in time 
loans or in securities which cannot promptly be turned into 
money. 

Liquidated damages. Damages determined as to amount 
either by agreement or by a judgment. 

Liquidation. Settling or winding up ; in speculation, clos^ 
ing of transactions either compulsorily or voluntarily. 

Listed stocks. Stocks which have been placed on the regu- 
lar list of the New York Stock Exchange and thereby admitted 
to dealings at the exchange. For details as to listed stocks see 
Admitted to dealings at the New York Stock Exchange. 

Literature. A name given to circulars or pamphlets which 
describe an undertaking, scheme or plan ; or which contain in- 
formation as to an issue of bonds or stock. 

LL. As printed on the tape by the stock ticker tliese letters- 
mean leased line, as leased line bonds. 

Lloyds. An association of English underwriters of marine 
insurance which also collects and distributes maritime intelli- 
gence. The corporation requires from each firm of underwrit- 
ers security to meet its obligations. It issues "Lloyds' Regis- 
ter" and other publications compiled from the reports of its- 
agents in various parts of the world. 

Loaded up. A Wall Street term which is applied to a specu- 
lator who is carrying more stocks than is advisable. 

Loan. Money lent the borrower of which pays interest on 
it while he has the use of it. See Call loan ; also see Time loan ; 
also see Collateral loan. 

Loanable capital. Money possessed by money lenders or 
the money held by banks which is available to borrowers. 

Loan and trust company. An incorporated banking institu- 
tion empowered by its charter to accept and execute trusts as 
provided by law; to receive deposits of money and other per- 
sonal property and issue obligations therefor and to lend 
money on real and personal securities. Such an institution is 
not permitted to issue bills to circulate as money. It cannot 
lend money at more than the legal rate on time and is not 
obliged to keep a lawful money reserve. 

Loan certificate. See Clearing house loan certificate. 

Loan crowd. The name applied to the gathering of brokers 



- SMITH'S FINANCIAL DICTIONARY. 289 

on the New York Stock Exchange who desire to borrow or 
lend stocks. For aaditional information see Borrowing and 
lending stocks. 

Loaned and borrowed securities. See Borrowing and lend- 
ing stocks. • 

LfOan-nionger. A negotiator of loans ; one who obtains loans 
for others, but is not a lender himself. The term is not in com- 
mon use. 

Loan society. A society organized to loan money, receiv- 
ing it back in instalments with interest. 

Lock-up. A colloquial banking term applied to a note or 
other piece of paper which has been renewed — that is, the time 
for payment extended beyond the original date. The term is 
derived from the fact that the money represented by the paper 
was not delivered when due but is withheld or locked up for a 
further period. 

Logical conditions or a logical market. Logical conditions 
exist in a stock when the price advances in consequence of the 
prosperity of the company which issued it, or such conditions 
exist when the price declines in consequence of the lack of 
prosperity of the company. Or, it may be that the price ad- 
vances or declines on unexpected developments in the affairs 
of the company or on prospective conditions affecting the com- 
pany. 

A logical market exists when the market as a whole moves 
(advances or declines) in accordance with general natural con- 
ditions. 

Lombard Street. Lombard street itself is a street in Lon- 
don largely composed of banks, but the name Lombard Street 
applies to the whole of the banking centre of London. The 
Lombard Jews began banking in Italy in 808. Some of these 
Lombards afterward went to London and settled in the narrow 
thoroughfare which is called after them, Lombard street. 

London clause. The name given to a clause inserted in a 
bill of lading which relieves the vessel from the payment of 
handling or dock charges on the cargo when landed at London 
and imposes such charges on the shipper. 

London prices. The term London prices as generally em- 
ployed in New York means the prices on the London Stock 



290 SMITH'S FINANCIAL DICTIONARY. 

Exchange of American stocks. For information see American 
stocks in London. 

London quotations. A quotation on the London Stock Ex- 
change merely means the price at which the jobber or dealer 
(practically a wholesaler in shares, that is, stocks) will either 
buy or sell, and he will do either. Thus, when a jobber quotes 
99 3-4 — 100 1-4 it means that he will buy at 99 3-4 or will seil 
at 100 1-4. When in giving a quotation the middle price is 
named it means the price midway between the jobber's buying 
and selling prices. In a regular quotation 99 3-4 — 100 1-4 the 
middle price is 100. 

On the New York Stock Exchange the quotations (except 
the bid and asked quotations) are the prices at which actual 
transactions took place. The bid and asked quotations are 
those printed by the ticker on the tape after the close of 
the stock exchange and while nominal are as nearly the ac- 
tual prices offered for or asked for stocks as are possible to 
obtain. They are furnished by the specialists in the different 
stocks — the brokers who make a specialty of executing orders 
in those stocks. The bid and asked prices are the only gage 
to the market value of stocks infrequently dealt in, especially 
those in which one or more days elapse between transactions. 

Also see Quotation. 

Lrondon Stock Exchange. The official title of the London 
Stock Exchange is "The Stock Exchange of London." It was 
founded toward the close of the seventeenth century. 

The London Stock Exchange consists of two distinct bodies. 
One body comprises the shareholders or proprietors of the 
company which owns the building and the title "The Stock Ex- 
change of London." The other body comprises the subscrib- 
ers, who are described as members of the exchange or "house." 

To the shareholders the exchange is a joint-stock undertak- 
ing from the profits of which they receive dividends the same 
as the shareholders of any corporation. The shareholders as 
shareholders have no right to enter the building, but they may 
become members under the same conditions as other subscrib- 
ers. Very few shareholders are now non-members and while 
such was not formerly the case only subscribers (members) 
may now become shareholders in the proprietary company. 



SMITH'S FINANCIAL DICTIONARY. 291 

The subscribers or members of the exchange merely rent 
the building with the right to transact business under the title 
of ''The Stock Exchange of London." The members are elect- 
ed for one year, beginning March 25, and in order to contimie 
as members they must be reelected each succeeding year. 
Members are elected (or rejected) by the governing body of 
the exchange which bears the title of "committee for general 
purposes." This committee itself is annually elected by the 
members. Members of the exchange on their original admi<?- 
sion have to pay an initiation fee as well as annual dues and 
have to find existing members to act as surety for them. On 
reelection they have not to pay another initiation fee, but 
they continue to pay annual dues. These dues are used \\\ 
payment of rental to the proprietary company and in payment 
of administration expenses. 

There are two classes of members, jobbers (or dealers) and 
brokers. Members can act in either capacity, but not in the 
double capacity at the same time. The jobber remains in one 
place in the house ready to deal with any one who comes to 
him. The broker buys and sells for the public for a compensa- 
tion, that is, a commission, whereas, the jobber makes the mar- 
ket and is prepared to buy from or sell to the broker, covering 
his bargain with a fresh purchase or sale. See Jobber. 

London Stock Exchange clearing house. In a room in the 
exchange designated as the clearing house stock differences 
are settled. The purpose of the clearing house is to avoid a 
multiplicity of deliveries by making merely deliveries of bal- 
ances. 

Illustration : If a member has sold in varying amounts to 
several other members £25,000 of a particular stock and has 
purchased in varying amounts from several other members 
£24,000 of the same stock there is a balance of £1,000 — the 
member has sold £1,000 more than he has bought. In other 
words, his sales have offset his purchases of £24,000, but there 
is a balance of £1,000 in sales in excess of purchases. 

The member reports at the clearing house both sales and 
purchases in detail for the purpose of record and comparison, 
but it is only in the adjustment of the balance or difference 
v.hat the clearing house acts. There are, of course, as many 



292 SMITH'S FINANCIAL DICTIONARY. 

purchases as there are sales in each stock dealt in on the ex- 
change, so that some other member has bought £i,oOo of the 
stock in question more than he has sold. The member who 
has sold £ I, GOO more than he has bought and the member who 
has bought £i,ooo more than he has sold are brought together 
by the clearing house. The clearing house gives to the first 
a ticket or memorandum directing him to deliver his excess 
of £i,ooo in sales to the second and at the same time it gives 
to the second a ticket directing him to receive from the first 
the £i,ooo in order to make up his (the second member's) ex- 
cess of £i,ooo in purchases. 

Thus, a single settlement may adjust and dispose of a num- 
ber — perhaps a dozen or a score — of separate transactions. 
The member who sold £i,ooo more than he bought may be 
directed to deliver £500 to a second member and £500 to a 
third member, but the principle involved and the outcome is 
the same. 

Also see New York Stock Exchange clearing house. 

Long. A speculator who has bought stocks is long — long 
of stocks ; he is a bull. The opposite of this term is short and 
a speculator who is short of stocks is a bear. 

On the London Stock Exchange it is the custom to say that 
a speculator is bull of stocks instead of long of stocks as is 
said on the New York Stock Exchange. Likewise, a specu- 
lator is said to be bear of stocks instead of short of stocks as 
is said on the New York exchange. 

Long account. A term applied to the collective purchases 
of a particular stock or to collective purchases of stocks in gen- 
eral, which purchases are in expectation of a rise in the price 
of the particular': stock or in the prices of stocks in general. 
The term also applies to corresponding purchases of grain^ 
cotton, cofifee, etc. 

Long and short haul clause. The designation for a clause 
in the Interstate commerce law which forbids a greater charge 
in the aggregate for the transportation of freight for a shorter 
than for a longer distance by the same line in the same direc- 
tion under substantially similar conditions. 

Long bill. Same as long-dated bill ; a bill of foreign ex- 
chang:e Cdraft) having a long time to run. A bill running for 



SMITH'S FINANCIAL DICTIONARY. 293 

60 days or more is usually termed a long bill or a long-dated 
bill. 

A long bill of exchange is sold at a lower price than a short 
or demand bill because the buyer loses the use of his money, 
which is the same as saying he loses interest on his money, 
until the bill falls due. 

Long bit. A term used in the Southern and Western stat-^s, 
meaning 15 cents. It is derived from the Spanish real, which 
used to circulate in those states and was called a bit and was 
worth, nominally, 12 1-2 cents. 

Long-dated bill. Same as long bill ; see Long bill. 

Long haul. A railroad term signifying transportation (of 
freight) for a long distance, in contradistinction to trans- 
portation for a short distance, which is called short haul. 

Also see Long and short haul clause. 

Long interest. The collective speculative holding of a par- 
ticular stock or of stocks in general ; the opposite of short 
interest. The expression "The long interest in the market," 
for example, signifies the aggregate speculative holdings of 
stocks in general. 

Long of exchange. When a dealer in (foreign) exchange 
has purchased and holds commercial or other bills exceeding 
in amount bills of his own which he has sold and which are 
outstanding he is long of exchange. 

For additional information see Foreign exchange. 

Long sterling. A name for a long bill of exchange payable 
in sterling ; see Long bill. 

Long-term bond. Same as long-time bond ; one not matur- 
ing for a long time (or term). 

Long-time bond. One not maturing for a long time. 

Long ton. Same as gross ton ; 2,240 pounds ; a short ton is 
2,000 pounds. A metric ton is 2,204.6 pounds. 

Lost or stolen securities. A coupon bond payable to bear- 
er or a stock certificate assigned in blank is good in the hands 
of an innocent and bona fide holder who acquires it by honest 
purchase at a fair market price without knowledge that it was 
fraudulently obtained by any previous holder even though it 
mav have been lost bv or stolen from its owner. 



294 SMITH'S FINANCIAL DICTIONARY. 

The recovery of a lost or stolen bond or stock certificate 
can rarely be accomplished unless it is found in the hands of 
the finder or of the thief or his accomplice or some person 
who has obtained possession of it by fraud or under circum- 
stances which will convict him of knowledge or suspicion of 
fraud on the part of the one from whom he received it. 

The fact that a lost or stolen bond or stock certificate has 
been advertised by its number does not invalidate the title of 
an innocent holder as it cannot be held that the purchaser of 
a bond or a stock certificate is bound to have knowledge of the 
advertisement. 

A registered bond is without coupons and is filled in with 
the name of the registered owner and is payable to him or his 
assigns. It is not available to any other person until properly 
assigned or transferred by the registered owner. If a regis- 
tered bond or a stock certificate not assigned in blank is lost 
or stolen the owner can secure a new bond or certificate by 
furnishing a bond of indemnity. 

Lot money. A charge made by an auctioneer for each lot of 
goods sold by him. 

Lottery bond. A lottery bond is one of an issue made (gen- 
erally by some government on the Continent of Europe) for 
some exceptional work, as an exhibition, bonuses being of- 
fered to subscribers in the shape of cash prizes which are 
drawn for periodically, the prizes going to the holders of bonds 
which bear numbers corresponding to those drawn. 

Louis. A colloquial name for the 20-franc gold piece of 
France, equal to $3.85.90 ; the name is derived from a gold coin 
of France of the seventeenth and eighteenth centuries. 

L. s. d. Pounds, shillings, pence ; collectively the abbrevia- 
tion is used in Great Britain to signify money. 

Lump sum. A gross sum covering several items. 

Lying down. This is a Wall Street colloquialism. When a 
speculator refuses to reimburse or evades liability to his 
broker for losses he lies down — lies down on his broker. The 
same term applies to any one who refuses to make good or 
evades an obligation of any kind. 



SMITH'S FINANCIAL DICTIONARY. 295 



M 



Made. The signer of a promissory note is said to have made 
the note. 

Made and closed. A speculative term, meaning a completed 
transaction — buying and then selling, or the reverse, selling 
and then buying ; the term is little used in stock dealings, but 
is common in dealings in grain, cotton, coffee, etc. 

Made merchantable. Abbreviation, M/m. 

Mailing securities. For directions seen Investment securi- 
ties. 

Maize. Indian corn ; in the United States simply called 
corn. In the English market reports when maize is mentioned 
corn is meant. In England corn means wheat specifically, 
but the term is applied to wheat, barley, rye and oats collec- 
tively. 

Make-down. When in order to effect a make-up (see Make- 
up) on the London .Stock Exchange a firm opens an account 
for this purpose with another firm the stocks or shares con- 
cerned are said to be made down; the name for the transac- 
tion is make-down. 

Maker. Designation for the signer of a negotiable instru- 
ment, as a promissory note, draft (bill of exchange) or check. 

Make-up. Stocks or shares are said on the London Stock 
Exchange to be made up when by means of bookkeeping 
cross entries the purchases and sales are settled without 
actual passing of the securities ; the name for the operation 
is make-up. Also see Make-down. 

Making a market. A Wall Street term which means mak- 
ing a show of demand and activity in a stock with the object 
of inducing outsiders to buy. 

Making a price. A stock market term ; when a seller at 
the request of a buyer names the price at which he will sell 
or a buyer at the request of a seller names a price at which 
he will buy a price is made. 

On the London Stock Exchange when a jobber (practically 
a wholesaler of stocks) is asked by a broker to make a price 



296 SMITH'S FINANCIAL DICTIONARY. 

he, not knowing whether the broker is buyer or seller, names 
the price at which he will buy and the price at which he will 
sell and the broker then deals. For instance, a broker who 
has £i,ooo consols to sell asks a jobber to make him a price 
in consols ; the jobber replies "96 3-4 — 7-8" and the broker says 
"Sell you £1,000," meaning that he sells the stock at 96 3-4; 
the jobber then seeks to undo the bargain by selling the stock 
to another jobber at 96 13-16, taking his "turn" of 1-16. 

Making-up day. Same as contango day or continuation day ; 
the first day of the settlement on the London Stock Ex- 
change when settling prices are announced and when, also, 
the rates for carrying-over or continuing bargains (contracts) 
are fixed. For additional information see Settlement, The. 

Making-up price. Settling price at the New York Stock 
Exchange clearing house. For information see New York 
Stock Exchange clearing house. 

Making-up prices on the London Stock Exchange are prices 
at which stocks in which there is any speculative account are 
made up or continued or carried over from one settlement to 
another. For instance, if one operator buys £ 1,000 consols and 
does not wish to pa}^ for the stock or sell it when the settlement 
comes but to continue the bargain in the expectation of a 
rise in the price he instructs his broker to carry the stock over 
lor him. The broker finds either a bear or a money lender who 
will take in the stock on receipt of a contango and carries 
over the stock with him ; that is to say, sells the stock to him 
for cash and buys it again for the new account, both bargains 
being carried out at the "making-up" price. The making-up 
price is thus always a single price and is not quoted double 
as ordinary prices are in London. 

Mala fide. Not in good faith. 

Manifest. A document giving the items of a vessel's cargo, 
with the names of consignees. 

Manipulation. In stock speculation this word is applied to 
the operation of working stocks up or down or both ways. 

A not uncommon method of manipulating a stock is by wash- 
ing, which consists in buying and selling the stock at the same 
time. The speculator who seeks to advance a stock in price 
by manipulation gives to one broker an order to bid it up on a 



SMITH'S FINANCIAL DICTIONARY. 297 

scale (that is, after each transaction in the stock to offer to buy 
a certain amount of the stock at, say, 1-8 of i per cent above 
the last price). To another broker the speculator gives an order 
to simultaneously sell the same amount of the stock at the ad- 
vancing prices. Thus, the speculator raises the price of the 
stock without actually acquiring any stock. If the speculator 
seeks to depress a stock in price the method pursued is the 
same. To one broker is given an order to offer the stock down 
(that is, after each transaction in the stock to offer to sell it 
at, say, 1-8 per cent below the last price). To another broker 
is given an order to buy the stock. These offsetting buying 
and selling orders which result in no accumulation of stock are 
known as wash or matched orders ; and the process of ad- 
vancing (or depressing) prices by wash or matched orders is 
known as marking up (or marking down) prices. 

A pool may be formed in a stock to manipulate it. The con- 
tributors to the pool (mutual fund) appoint a manager of it 
who conducts the operations in: the stock. If it is a bull pool 
the first step is to buy as much stock as is desired at as low 
prices as possible and then by means of wash transactions in 
the stock advance the price to a point where the stock actually 
held can be sold at a satisfactory profit. If it is a bear pool the 
first step is to sell short (sell stock not owned) to the extent 
desired at as high prices as possible and then by means of wash 
transactions in the stock depress the price to a point where the 
stock actually sold short can be bought back at a satisfactory 
profit. 

Manual signature. The signature of a person in his own 
hand. 

Manufacture. Anything made by industrial art or progress ; 
also, figuratively, the product or result of any process, as 
steel. 

Margin. The money deposited with a broker by a specu- 
lator in stocks or in grain, cotton, coffee, etc., to protect the 
broker against loss. 

In stocks the margin required by a broker ranges from 5 to 
20 per cent of the par (face) value according to the character 
of the securities. An average margin is 10 per cent, which is 
equal to $1,000 on 100 shares of stock or $10,000 of bonds. 



298 SMITH'S FINANCIAL DICTIONARY. 

When a stock advances or declines in price (as the case 
may be) to near the limit of the margin furnished the broker 
is privileged if the customer does not respond to a call for 
additional margin to sell the stock that has been bought or 
.to buy back the stock that has been sold short. The broker 
is bound to give to the customer reasonable and customary 
notice when additional margin is required unless there is an 
agreement beforehand to the contrary. 

Stocks or bonds bought on margin by a broker for a cus- 
tomer are at all times, in the absence of an express agreement 
to the contrary, subject to the order of the customer. The 
customer has the right to possession of the stocks or bonds 
upon payment of the purchase price and the commissions and 
proper expenses. In the absence of an express agreement the 
broker may at his option upon reasonable notice require a 
customer to take up, that is, pay in full for the stocks which he 
is carrying for the customer. If the customer is short of stocks 
the broker may demand that he buy back the stocks or trans- 
fer the operation to another broker. 

If a speculator buys on the New York Stock Exchange lOO 
shares of stock at lOO on lo per cent margin his broker re- 
ceives the stock and pays $10,000 for it to the broker from 
whom it was purchased. The buying broker has received 
$1,000 from his customer and he advances $9,000 to the cus- 
tomer, holdmg the stock as security for ttie money so ad- 
vanced. On the $9,000 he charges interest (usually 6 per 
cent). If the stock is sold later at no $11,000 is received for 
it. The gross profit is $1,000, but from this amount is deducted 
the broker's commission and the interest on the money ad- 
vanced by the broker. 

If a speculator sells a stock short he puts up margin the 
same as when he buys long stock — buys not in discharge of a 
short contract but to sell again. If the stock is sold at too 
and is bought back at 90 the speculator's profit is $1,000, less 
the broker's commission. Ordinarily no interest has to be 
paid on stock sold short. (For explanation see Interest). 

Margins usually required on commodities are: Grain, 5 
cents per bushel on 5,000 bushels, $250; lard, 1-2 cent per 
pound on 250 tierces (85,000 pounds), $425; pork, $1 per 
barrel on 250 barrels, $250; short ribs, 1-2 cent per pound on 



SMITH'S FINANCIAL DICTIONARY. 299 

50,000 pounds, $250; cotton, $1 per bale on 100 bales (50,000 
pounds), $100; coffee, i cent per pound on 250 bags (32,500 
pounds), $325; silver bullion, 10 cents per ounce on 1,000 
ounces, $100. 

For information as to deposits of margin on time contracts 
in stocks, grain, cotton, coffee, etc., see Mutual deposits on 
a contract. 

Marginal credit. In exchange, particularly foreign ex- 
change, the term marginal credit refers to a commercial letter 
of credit which may be drawn against within the margin of 
the letter, or in other words, up to the amount specified in the 
letter. 

Such a credit is as a rule employed in a triangular opera- 
tion. Example : A merchant in New York wishes to buy 
goods in China. He procures a letter of credit from a dealer 
in foreign exchange in New York which is to be honored by 
the correspondent in London of the dealer who issued it. Or- 
dinarily goods purchased in China by a New York merchant 
are paid for in London. The New York merchant forwards 
the letter of credit with his order for goods to the party of 
whom he is to buy the goods in China. The seller of the 
goods in China ships the goods and draws a draft for the 
amount of them against the New York merchant's credit in 
London. To the draft is affixed the authorization to draw, the 
letter of credit, and likewise the bill of lading for the goods. 
The draft is sold in China and forwarded to London for col- 
lection the same as any other draft and in due course it is trans- 
mitted with the bill of lading to New York. Thus, the seller 
of the goods in China has not parted with his goods until he 
has obtained or made sure of payment and the New York mer- 
chant who has bought them has not paid for them (by use of 
his letter of credit) until the bill of lading giving title to them 
has been surrendered. * 

Marie Theresa thaler or dollar. A silver coin still struck 
(minted) by Austria, bearing the uniform date of 1780 and 
used in the trade with the Levant. It is sometimes called the 
Levantine thaler or dollar. It is equal to $1.01.31. 

Marine or maritime interest. Extra interest is charged be- 
cause 01 the extra risk involved when money is advanced on 
a bottomry bond (a mortgage on a vessel). 



300 SMITH'S FINANCIAL DICTIONARY. 

Maritime loan. A loan for which a bottomry bond (a pledge 
of the vessel) or respondentia bond (a pledge of cargo) is given 
as security. 

Mark. In dealings on the New York Stock Exchange four 
reichsmarks (marks) is counted as $i. The actual value of 
four marks is 95.2 cents ; the quotable equivalent of 100 in 
marks, therefore, 95 1-4. The value of i German mark is 23.82 
cents. 

The term mark also is applied to the X which a person who 
-cannot write uses as a signature. For additional information 
see Signing by mark. 

Marked check. Many concerns have a private mark which 
they put on their checks. This mark is known to the banks 
w^here the concerns keep their accounts and its absence from 
a check is sufficient reason for withholding payment until the 
concern by which it purports to have been drawn can be 
communicated with to find out whether the check is genuine. 
The purpose of the mark is to afford protection against for- 
gery. 

There is one disadvantage in placing a private mark on a 
check. If a forger finds out this mark and places it on a forged 
check the check is more likely to be paid by the bank than if 
the mark were not used. 

Marked transfer. London Stock Exchange term ; when a 
stockholder has sold only a portion of the stock represented 
b)y a certificate held by him the certificate and a transfer deed 
(assignment) are lodged with the company, which issues a 
fresh certificate to him for the amount unsold and indorses the 
transfer to the effect that it is good for the remaining amount 
of stock ; then, the transfer is said to be certified or marked 
and the act of certifying or marking is called certification. 

Market. A market is a place where dealings are conducted, 
as dealings in stocks or in grain, cotton or coffee, etc. 

The expression "the market," is commonly employed as a 
general designation for the business, whether on an exchange 
or not, in stocks or commodities, as the market is strong or 
active or weak or dull. 

The lending of money is not concentrated. in one place; it is 
in the hands of many persons with whom negotiations are con- 
ducted in person by borrowers or through brokers at the in- 



SMITH'S FINANCIAL DICTIONARY. 301 

dividual places of business of the lenders, and yet it is the 
practise to speak of the money market as a collective affair. 

On the London Stock Exchange the jobbers who deal in a 
particular stock or a particular group of stocks constitute the 
market in that stock or group of stocks ; likewise, the place 
where they congregate is called the market in that stock or 
group of stocks. Accordingly, there are many markets on the 
London Stock Exchange. The place where American stocks 
are dealt in is called the American market; the place where 
South African mining shares are dealt in is called the Kaffir 
market ; and so on. 

Market difference. A change in the market price after a 
stock has been bought or sold short, necessitating the provid- 
ing of more margin (or perhaps permitting the withdrawal of 
margin in part or in whole). 

For information as to deposits of margin required to cover 
market differences on time contracts in stocks, grain, cotton, 
coffee, etc., see Mutual deposits on a contract. 

Marketing. Selling. 

Market money. Money that is offering in the market — 
money that may be borrowed. 

Market price. The actual current price. 

On the London Stock Exchange the market price of a stock 
is a double-price — the price at which a jobber (practically a 
wholesaler of stocks) will sell and the price at which he will 
buy, and he will do either. 

Market value. In stocks the amount which a' stock or bond 
will bring on an exchange or in the open market. 

Marking bargains. London Stock Exchange term ; jobbers 
or brokers on the exchange drop into a box tickets containing 
prices at which business was done by them between the hours 
of II a. m. and 3 p. m. and this is called marking bargains. 
These prices are inserted in the Stock Exchange Daily Official 
List under the heading "Business done." 

Marking up or marking down loans. Said when lenders 
increase (mark up) or reduce (mark down) the rates on call 
loans. When a call loan is marked up the borrower renews 
it at the new rate. When a loan is marked down it is con- 
tinued at the new rate. 

Marking up or marking down prices. A not uncommon 



302 SMITH'S FINANCIAL DICTIONARY. 

method of manipulating a stock is by washing, which consists 
in buying and selling the stock at the same time. The specu- 
lator who seeks to advance a stock in price by manipulation 
gives to one broker an order to bid it up on a scale (that is, 
after each transaction in the stock to offer to buy a certain 
amount of the stock at, say, i-8 of i per cent above the last 
price). To another broker the speculator gives an order to 
simultaneously sell the same amount of the stock at the ad- 
vancing prices. Thus, the speculator raises the price of the 
stock Avithout actually acquiring any stock. If the speculator 
seeks to depress a stock in price the method pursued is the 
same. To one broker is given an order to offer the stock down 
(that is, after each transaction in the stock to offer to sell it 
at, say, i-8 per cent below the last price). To another broker 
is given an order to buy the stock. These offsetting buying 
and selling orders which result in no accumulation of stock 
are known as wash or matched orders ; and the process of ad- 
vancing (or depressing) prices by wash or matched orders is 
known as marking up (or marking down) prices. 

MAT. As printed on the tape by the stock ticker these 
letters mean matured, as matured bonds (bonds the principal 
of which is due and interest on which has ceased). 

Matched order. A Wall Street term, meaning an order to 
buy and sell the same stock ; such an order is employed for the 
purpose of artificially raising or lowering the price. 

Matthew Marshall. Prior to January i, 1855, the Bank of 
England notes bore a promise to ^'pay Matthew Marshall or 
bearer" ; since that date the notes have borne a promise to 
"pay to bearer on demand." 

Matured. As applied to an obligation matured means that 
the obligation has become due and is payable. When a bond 
has matured the principal is due and interest on it ceases. 

Maturity. The time fixed for the payment of a promissory 
note or of a bill (draft). The term is used particularly with 
reference to foreign bills of exchange. When it is said that 
maturities in a certain month are large it is meant that a large 
number of bills mature or fall due in that month. 

An obligation is said to have reached maturity when it has 
become due and payable. 

Maundy money. Silver fourpenny, threepenny, twopenny 



SMITH'S FINANCIAL DICTIONARY. 303 

and penny pieces specially struck (minted) each year in Great 
Britain for distribution as alms by the sovereign on Maundy 
Thursday — the day before Good Friday. These coins never 
pass into circulation but are gathered up by numismatists. 
Melon. See Cutting a melon. 

Memorandum. A brief written summary or outline of the 
terms of a transaction. 

Also see On memorandum. 

Memorandum check. When a bank sends through the clear- 
ing house a check payable by another bank and it is rejected 
by that bank because there are no funds on deposit with 
which to meet it or for some other reason the second bank 
returns it by messenger to the first bank. The first bank hav- 
ing been credited with it and the second bank having been 
debited with it at the clearing house the first bank must pay 
the amount of it to the second bank. It accordingly delivers 
the amount of it in money to the second bank's messenger if 
the check is small ; if the amount is large it issues to the 
second bank a memorandum check which the second bank 
sends through the clearing house the next day for collection. 

Memorandum of association. London term used in connec- 
tion with the4Ticorporation of companies ; it means the charter 
of the company, which defines its powers and states its objects. 
The Secretary's Manual on the Law and Practice of Joint- 
Stock Companies quotes a statement by Lord Justice Bowen 
which thus distinguishes the Memorandum and Articles of 
Association : "The Memorandum contains the fundamental 
conditions upon which alone the company is allowed to be in- 
corporated. They are conditions introduced for the benefit of 
the creditors and the outside public as well as shareholders. 
The Articles are the internal regulations of the company." 

Mercantile. Pertaining to the business of buying and sell- 
ing merchandise ; commercial. 

Mercantile account. A statement of transactions between 
a merchant and his customer. 

Mercantile agency. Same as commercial agency ; a concern 
which with the cooperation of merchants, manufacturers, 
bankers and others ascertains, records and makes known to 
its patrons or subscribers the financial standing, general busi- 



304 SMITH'S FINANCIAL DICTIONARY, 

ness reputation and credit ratings of individuals, firms and 
corporations engaged in mercantile and industrial enterprises. 

In addition it compiles reports on the state of trade and 
on commercial and financial operations generally, including 
records of failures, judgments, etc. 

Mercantile law. The law of commercial contracts and the 
usages or customs of business. 

Mercantile paper. Promissory notes given by merchants 
for merchandise purchased or drafts drawn against purchas- 
ers of merchandise. The term commercial paper includes mer- 
cantile paper. For complete information see Commercial 
paper. 

Merchandise. Anything movable that is customarily bought 
and sold for profit. 

Merchandise note. A promissory note issued in payment 
for merchandise. 

Merchandising. Mercantile business ; buying and selling 
goods. 

Merchant bar. Iron in the common bar form convenient for 
the market. 

Merger company. A company formed for the purpose of 
acquiring other companies — that is, it issues its own stock in 
exchange for the stocks of other companies and thus merges 
the other companies in itself. 

Metallic standard. Exists when the basis of value is gold 
or silver, or gold and silver together at an established ratio. 

For additional information see Monetary standard. 

Metric ton. One-thousand kilograms, or 2,204.6 pounds. 
A gross or long ton is 2,240 pounds ; a short ton is 2,00Q 
pounds. 

Mexican dollar. The actual name is peso. Its weight is 
417.8 grains .902.7 fine. At the coining rate of the United 
States silver dollar it is worth $1.01.59; its nominal or osten- 
sible value in gold is 98.39 cents. Its actual value outside of 
Mexico depends on the commercial (market) price of silver. 

Middleman. One who conducts negotiations between sell- 
er and buyer ; also, one who buys in bulk and sells in smaller 
lots ; a jobber. 

Middle price. London Stock Exchange term, meaning the 



SMITH'S FINANCIAL DICTIONARY. 305 

price midway between the price at which a jobber (dealer) 
will sell and the price at which he will buy. Thus, in a quota- 
tion 99 3-4 — 100 1-4 the middle price is 100. 

Mileage. ]Means length or distance in miles. 

The road mileage of a railroad is the length in miles of the 
railroad itself. 

Track mileage is the length in miles of the tracks of the 
railroad, each mile of double track being counted as two miles ; 
side tracks and switching tracks- also being counted and in- 
cluded in the mileage. Track miles means the same as track 
mileage. 

Train mileage is the number of miles traversed by a particu- 
lar train ; or the number of miles, collectively, traversed by all 
trains of a railroad. The result attained by adding together 
the number of miles traversed by all trains and dividing by the 
number of trains shows the average number of miles traversed 
by each train. Train miles means the same as train mileage. 

Car mileage is the number of miles traversed by a particular 
car; or, again, it is the number of miles, collectively, trav- 
ersed by all cars. The result attained by adding together the 
number of miles traversed by all cars and dividing by the 
number of cars shows the average number of miles traversed 
by each car. Car miles means the same as car mileage. 

Ton mileage is the number of miles the whole number of 
tons was hauled. The average number of miles each ton was 
hauled (transported) is ascertained by adding together the 
number of miles each ton was hauled and then dividing by the 
number of tons. Ton miles means the same as ton mileage. 

Passenger mileage means the number of miles, collectively, 
traveled by all passengers. The number of miles traveled 
by all passengers divided by the number of passengers shows 
the average number of miles traveled by each passenger. Pas- 
senger miles means the same as passenger mileage. 

Milking. In Wall Street parlance milking the street or milk- 
ing the market is the manipulation of stocks by a clique for 
their profit and to the loss of others to whom they sell or from 
whom they buy. ]\Iilking the public is the manipulation of 
stocks by a clique for their profit and to the loss of the public. 

Mille. One thousand. Therefore, per mille means per 
thousand. A premium of i per mille is i on 1,000, which is 



3o6 SMITH'S FINANCIAL DICTIONARY. 

equal to i-io of i per cent. For instance, if the Bank of France 
charges a premium of i per mille for gold the premium is I 
franc on every i,ooo francs of gold. 

Milling. The name applied to the corrugated edge of gold 
and silver coins which was devised to prevent the reduction of 
coins by cutting ofT the rims. 

Mining stocks. These stocks are usually quoted In dollars 
and cents instead of in percentages. 

Minor coins. Five-cent nickel — weight, 77.16 grains, 75 
per cent copper and 25 per cent nickel ; thickness, .062 inch ; 
diameter, .8 inch. One cent bronze — weight, 48 grains, 95 per 
cent copper and 5 per cent tin and zinc; thickness, .043 inch; 
diameter, .75 inch. 

Minor coins are issued according to the needs of the coun- 
try and are redeemable at the Treasury in sums of $20 and 
multiples thereof. 

Mint. A place where the coin of a country is coined (man- 
ufactured) and from which it is issued by governmental au- 
thority. 

Mintage. The duty or charge paid for coining; also, the 
seigniorage or profit in coining. 

Mint check. A check on the United States Treasury drawn 
by a mint and given in payment for gold deposited in the mint. 

Mint-mark. A private mark of a mint placed on coins to 
identify the place of manufacture. Coins minted in the Phit- 
adelphia mint bear no special mark. Those minted at Carson 
City, Nev., are marked C.C. ; those at Dahlonega, Ga., D. ; those 
at New Orleans, O. ; those at San Francisco, S. 

Mint-master. The master or superintendent of a mint. 

Mint par. The equivalent unit (monetary unit) of one 
country expressed in the terms of the currency of another 
country which uses the same metal as a standard of value. 
Thus, $1 in United States gold money is 4.1 1 shillings or 4 
shillings i 1-3 pence in English gold money, or 5 francs 18 cen- 
times in French gold money, or 4 reichsmarks (marks) 20 
pfennigs in German gold money, or 2 guilders (florins) 49 
cents in Netherlands (Holland) gold money, and so on. 

Mint remedy. Same as tolerance ; the extent to which coins 
may be abraded (reduced in weight by abrasion) or otherwise 



SMITH'S FINANCIAL DICTIONARY. 307 

worn and still be redeemable at the Treasury at their face 
value. 

The law says that any gold coins of the United States re- 
duced in weight by natural abrasion not more than 1-2 of i per 
cent after a circulation of twenty years, as shown by the date 
of coinage, and at a ratable proportion for any period less than 
twenty years, shall be received at their nominal value by the 
United States Treasury. 

The tolerance on silver and base-metal coins is unlimited; 
the Treasury will receive them at their face value until abra- 
sion or wear has obliterated the inscriptions on them. 

The term mint remedy or tolerance also applies to the al- 
lowance for a slight difference in the fineness of gold or silver 
from the government standard. In gold the limit of difference 
above or below is one-thousandth ; in silver it is three-thous- 
andths. 

Mutilated coins, either gold, silver, nickel or bronze, are 
worth only their bullion value, or in other words, are worth 
only the commercial value of the metal of which they are com- 
posed. 

Mint tie. The equivalent of the metallic money of one coun- 
try in that of another country; mint par; for additional infor- 
mation see Mint par. 

Minute book. A book in which are kept the details of the 
proceedings at meetings of the stockholders or the board of 
directors of a stock company or of a committee of the board of 
directors. 

Miscellaneous assets. Assets of various kinds. 

Miscellaneous securities. Those issued by corporations 
which, unlike railroad companies and industrial (manufactur- 
ing) companies, have no special classification. 

Mississippi Company. In 1718 John Law, a financial ad- 
venturer, the son of a goldsmith in Edinburgh, Scotland, 
created in Paris, with the consent and concurrence of the 
regent of France (Due D'Orleans), the Company of the West, 
to which was granted the vast territory in the valley of the 
Mississippi in North America which bore the name of Louis- 
iana. In this company also were vested the privileges and 
possessions of all foreign trading companies, the control of the 
French mint, the handling of the king^s revenues and the 



3o8 SMITH'S FINANCIAL DICTIONARY. 

management of the Royal Bank. Subsequently the com- 
pany assumed the title of Company of the Indies on its ac- 
quisition of the exclusive rights of the East India Company 
in addition to its other prerogatives. The company was al- 
ways commonly known as the Mississippi Company; it de- 
rived this name from the fact that through the province of 
Louisiana which was granted to it flowed the great Missis- 
sippi River. 

A wild speculation took place in the stock of the company. 
The shares, which were of the par or face value of 500 livres 
(about $100) each, sold in September, 1719, as high as 10,000 
livres (about $2,000) each. In the middle of the following 
year the whole scheme collapsed and John Law, who held the 
office of Comptroller General of the Finances of the Empire, 
fled from France. 

Mistake. When personal property (as stocks, or bonds) is 
by mistake offered for sale at a lower price than was intend- 
ed and the offer is accepted by one who knows or has good 
reason to believe that it was a mistake the sale is not binding 
upon the seller. 

Mixed loan. A loan secured by collateral of different char- 
acter, as railroad and industrial stocks, instead of railroad 
stocks alone or industrial stocks alone. 

MLf. As printed on the tape by the stock ticker these let- 
ters mean main line, as main line bonds. 

M/m. Made merchantable. 

Mock auction. Said when the auctioneer employs con- 
federates to bid against genuine bidders so as to raise prices. 

Monetary. Pertaining to money or finance ; consisting of 
money; financial; pecuniary; as monetary convention, mone- 
tary union, etc. 

Monetary events. Following is a summary of monetary 
events of the world, beginning with 1786, as compiled by the 
Bureau of the Mint in the Treasury Department of the Unit- 
ed States : 

1786. — Establishment of the double standard in the United States with 
a ratio of i to 15.25 ; that is, on the basis of 123.134 grains of fine gold for 
the half-eagle or $5 piece, and 375.64 grains of fine silver for the dollar, 
without any actual coinage. 

1792. — Adoption of the ratio of i to 15 and establishment of a mint 



I 



SMITH'S FINANCIAL DICTIONARY. 309 

with free and gratuitous coinage in the United States ; the silver dollar 
equal to 371 )4 grains fine, the eagle to 247]^ grains fine. 

1803. — Establishment of the double standard in France on the basis of 
the ratio of i to 153^, notwithstanding the fact that the market ratio was 
then about i to 15. 

1810. — Introduction of the silver standard in Russia on the basis of the 
ruble of 17.99 grains of fine silver, followed in 1871 by the coinage of im- 
perials or gold pieces of 5 rubles, of 5.998 grams, therefore with a ratio of 
I to 15. This ratio was changed by the increase of the imperial to 5 rubles 
15 copecks, and later to i to 15.45. 

1815. — Great depreciation of paper money in England, reaching 26^^ 
per cent in May. Course of gold, £5 6s., and of silver 71 ^d. per ounce 
standard. In December the loss was only 6 per cent. Gold at this period 
was quoted at £4 3s., and silver at 64d. 

1816. — Abolition of the double standard in England, which had had as 
its basis the ratio of i to 15.21, and adoption of the gold standard on the 
basis of the pound sterling at 7.322 grams fine in weight. Coinage of 
divisional money at the rate of 66d. per ounce. Extreme prices £4 2s. 
for gold and 64d. for silver in January ; £3 i8s. 6d. and 59^d. in December. 

1816. — Substitution for the ratio of i to 15.5 in Holland, established 
by a rather confused coinage, of the ratio of i to iSlA- 

1819. — Abolition of forced currency in England. Price of gold £3 
17s. 10^ d. and of silver 62d. per ounce in October, against £4 is. 6d. and 
67d. in February. 

Note. — The price of silver given hereafter represents the average rate 
per ounce standard — ^that is, the mean between the highest and the lowest 
price quoted during the year. 

1832. — Introduction of the monetary system of France in Belgium with 
a decree providing for the coinage of pieces of 20 and 40 francs, which, 
however, were not stamped. Silver, 59%d. 

1834. — Substitution of the ratio of i to 16 for that of i to 15 in the 
United States by reducing the weight of the eagle, $10 gold piece, from 270 
grains to 258 grains. 

1835. — Introduction of the company rupee, a piece of silver weighing 
165 grains fine, in India, in place of the sicca rupee. Creation of a trade 
coin — the mohur, or piece of 15 rupees — containing 165 grains of fine gold. 
Silver, 59 ii-i6d. 

1837. — Fineness of United States gold coins raised from 0.899225 to 0.900, 
and silver coins from 0.8924 to 0.900, giving a ratio of i to 15.088 and 
fixing the standard weight of the silver dollar at 412^ grains. Silver, 
59 i5-i6d. 

1844. — Introduction of the double standard in Turkey, with the 
ratio of i to 15.10. Silver, 59H<J- 

1847. — Abolition of the double standard in Holland by the introduc- 
tion of the silver standard on the basis of a i-florin piece, 0.945 gram fine 
the coinage of which had already been decreed in 1839. Silver 59 ii-i6d. 

1848. — Discovery of the gold mines of California. 



310 SMITH'S FINANCIAL DICTIONARY. 

1848. — Coinage in Belgium of pieces of 10 and 25 francs in gold, a 
shade too light. These pieces were demonetized and withdrawn from 
circulation in 1884. Silver, 59^d. 

1848. — Replacing the ratio of i to 16 in Spain, which had been in force 
since 1786, by that of i to 15.77. 

1850. — Introduction of the French monetary system in Switzerland, 
without any actual coinage of gold pieces. Silver, 60 i-i6d. 

1851. — Discovery of the gold mines of Australia. 

1853. — Lowering of the weight of silver pieces of less value than $1 to 
the extent of 7 per cent in the United States and limitations of their legal- 
tender power to $5. Silver, 6iJ^d. 

1853. — Maximum of the production of gold reached in California when 
it amounted to $65,000,000. 

1854. — Introduction of the gold standard in Portugal on the basis of 
the crown of 16.257 grams fine. Before this period the country had the 
silver standard, with a rather large circulation of gold coins stamped on 
the basis of i to 15^ in 1835 and i to i6j^ in 1847. Silver, 6i}^d. 

1854. — Modification of the ratio of i to 15.77 ^^ Spain by raising it to 
I to 15.48, and by lowering the piaster from 23.49 grams to 23.36 grams fine. 

1854. — Introduction of the silver standard as it existed in the mother 
country, in Java, in place of the ideal Javanese money and coinage of 
colonial silver pieces. 

1857. — Conclusion of a monetary treaty between Austria and the Ger- 
man states, in accordance with which i pound of fine silver (one-half a 
kilogram) was stamped into 30 thalers or 52^ florins of south Germany, 
or 45 Austrian florins, resulting in i thaler equaling i^ German florins or 
il4 Austrian florins. Silver, 61 %d. 

1861. — Law decreeing the coinage of gold pieces of 10 and 20 francs 
exactly equal to French coins of the same denomination in Belgium. Sil- 
ver, 61 ^d. 

1862. — Adoption of the French monetary system by Italy. Silver, 
61 7-i6d. 

1865. — Formation of the Latin Union between France, Belgium, Switz- 
erland, and Italy on the basis of a ratio of i to 15^. Silver, 61 i-i6d. 

1867. — First international monetary conference held in Paris. 

1868. — Adoption of the French monetary system by Roumania, with the 
exclusion of the 5-franc silver piece, which was, however, stamped in 1881 
and 1883. Silver, 6o^d. 

1868. — Admission of Greece into the Latin Union. The definite and 
universal introduction of the French monetary system into the country was 
effected only4n 1883. 

1868. — Adoption of the French monetary system, with the peseta or 
franc as the unit, by Spain. The coinage of alphonses d'or of 25 pesetas 
was made only in 1876. 

1 871. — Replacing of the silver standard in Germany by the gold stand- 
ard. Coinage in 1873 of gold pieces of 5, 10, and 20 mark pieces, the latter 
weighing 7.168 grams fine. Silver, 6oJ/^d. 



SMITH'S FINANCIAL DICTIONARY. 311 

1871. — Establishment of the double standard in Japan with the ratio of 
I to 16.17 by the coinage of the gold yen of 1.667 grams and of the silver 
yen of 26.956 grams, both with a fineness of 0.900. 

1873. — Increase of the intrinsic value of the subsidiary coins of the 
United States. Replacing of the double standard by the gold standard. 
Reduction of the cost of coinage of gold to one-fifth per cent, the total 
abolition of which charge was decreed in 1875. Creation of a trade dollar 
of 420 grains with a fineness of 0.900. Silver, 59^ d. 

1873. — Suspension of the coinage of 5-franc pieces in Belgium. 

1873. — Limitation of the coinage of 5 francs on individual account in 
France. 

1873. — Suspension of the coinage of silver in Holland. 

1873. — Formation of the Scandinavian Monetary Union. Replacing of 
the silver standard in Denmark, Sweden, and Norway by that of gold on 
the basis of the krone. Coinage of pieces of 10 and 20 kroner, the latter 
weighing 8.961 grams, with a fineness of 0.900. 

1874. — Introduction of the system of contingents for the coinage of 
5-franc silver pieces in the Latin Union. Silver, 58 5-i6d. 

1875. — Suspension of the coinage of silver on individual account in 
Italy. Silver, 563^ d. 

1875. — Suspension of the coinage of silver on account of the Dutch 
colonies. 

1875. — Introduction of the double standard in Holland on the basis of 
the ratio of i to 15.62 by the creation of a gold piece of 10 florins, weigh- 
ing 5.048 grams fine, with the maintenance of the suspension of the coinage 
of silver. 

1876. — Great fluctuations in the price of silver, which declined to 46^d., 
representing the ratio of i to 20.172, in July. Recovery, in December, to 
58j^d. Average price, 52^d. 

1877. — Coinage of 5-franc silver pieces by Spain continued later, not- 
withstanding the decline of silver in the market. Silver, 54^d. 

1877. — Replacing of the double standard in Finland by that of gold on 
the basis of the mark or franc. 

1878. — Act of United States Congress providing for the purchase, from 
time to time, of silver bullion, at the market price thereof, of not less than 
$2,000,000 worth per month as a minimum, nor more than $4,000,000 worth 
per month as a maximum, and its coinage as fast as purchased into silver 
dollars of 412^ grains. The coinage of silver on private account pro- 
hibited. Silver, 52 9-i6d. 

1878. — Meeting of the second international monetary conference in 
Paris. Prolongation of the Latin Union to January i, 1886. 

1879. — Suspension of the sales of silver by Germany. Silver, 5ij4<i. 

1879. — Resumption of specie payment by the United States. 

1881. — Third international monetary conference in Paris. Silver, 
51 ii-i6d. 

1885. — Introduction of the double standard in Egypt. Silver, 48^d. 

1885. — Prolongation of the Latin Union to January i, 1891. 



312 SMITH'S FINANCIAL DICTIONARY. 

1886. — Great decline in the price of silver, which fell in August to 42d., 
representing a ratio of i to 22.5, and recovery, in December, to 46d. Modi- 
fication of the coinage of gold and silver pieces in Russia. Silver, 45^d. 

1887. — Retirement of the trade dollars by the Government of the 
United States in February. Demonetization of the Spanish piasters, 
known as Ferdinand Carolus, whose reimbursement at the rate of 5 pesetas 
ended on March 11. New decline of silver in March to 44d., representing 
the ratio of i to 21.43. Silver, 44^d. 

1890. — United States — Repeal of the act of February 28, 1878, com- 
monly known as the Bland-Allison law, and substitution of authority 
for purchase of 4,500,000 fine ounces of silver each month, to be paid 
for by issue of Treasury notes payable in coin. (Act of July 14, 1890). 
Demonetization of 25,000,000 lei in pieces of 5 lei in Roumania in con- 
sequence of the introduction of the gold standard by the law of Octo- 
ber 2y. Silver, 47 ii-i6d. 

1891.— Introduction of the French monetary system in Tunis on the 
basis of the gold standard. Coinage of national gold coins and billon. 
Silver, 45 i-i6d. 

1892. — Replacing of the silver standard in Austria-Hungary by that of 
gold by the law of August 2. Coinage of pieces of 20 crowns, containing 
6.098 grams fine. The crown equals one-half florin. Meeting of the fourth 
international monetary conference at Brussels. Production of gold reaches 
its maximum, varying between 675,000,000 and 734,000,000 francs. Silver, 
39 i3-i6d. 

1893. — Suspension of the coinage of silver in British India and of 
French trade dollars on individual account. Panic in the silver market in 
July in London, when the price fell to 30^ d., representing the ratio of i to 
30.92. Repeal of the purchasing clause of the act of July 15, 1890, by the 
Congress of the United States. 

1895. — Adoption of the gold standard by Chile. 

1895. — Russia decides to coin 100,000,000 gold rubles in 1896. 

1896. — Costa Rica adopts the gold standard. 

1896. — Russia decides to resume specie payments. 

1897. — Adoption of the gold standard by Russia and Japan. 

1897. — Peru suspends the coinage of silver and prohibits its importa- 
tion. 

1898. — Ecuador limited the tender of silver coins to the amount of 10 
sucres. 

1899. — India adopted the gold standard at the rate of 15 rupees to i 
pound sterling (British standard). 

1900. — United States adopted the gold standard. 

Monetary standard. The standard of value established by- 
law as the basis for the money of a country. 

By a long process of evolution or natural selection gold 
and silver have been left in possession of the field to the ex- 
clusion of everything else and now all the monetary systems 



SMITH'S FINANCIAL DICTIONARY. 313 

of the world are based on one or the other or both together. 
Gold, however, is rapidly becoming the universal standard 
in law as it has been in fact for many years. 

Great Britain first adopted the gold standard (1816), One 
by one the nations have fallen into line, the United States as 
recently as 1900, leaving the Latin Union as the most im- 
portant representative of the double standard system, while 
the use of silver as the standard is practically confined to the 
Far East and to IMexico and some parts of Central and South 
America. 

The bimetallic system in its unrestricted form has proved 
a failure owing to the wide variation in value between gold 
and silver and no nation any longer undertakes to coin both 
gold and silver in unlimited quantities. The countries which 
still retain nominally the double standard place severe restric- 
tions on the use of silver and mint it only on government ac- 
count, while gold is coined as freely as it is ofifered. 

Thus, gold has become practically the standard of the 
world, for not only do the double standard countries restrict 
the use of silver for the purpose of keeping their silver money 
at a parity with gold, but the silver standard countries in all 
international transactions are forced to use gold as the basis 
of exchange. 

The value of a gold coin depends on the amount of pure 
gold it contains ; therefore, governments in establishing their 
monetary standard and monetary unit declare by law the 
weight and quality of the coin in which values are to be meas- 
ured. Thus, in the United States, where gold is the standard 
and the dollar the unit, it is enacted that a gold dollar shall 
contain 23.2 grains of pure gold and 2.6 grains of alloy, mak- 
ing the weight of the dollar 25.8 grains of standard gold — gold 
.900 fine. In Great Britain the unit is the sovereign or pound 
sterling and contains 113 grains of pure gold and 10.27 grains 
of alloy, making the standard of fineness .916 2-3 instead of 
.900 as in the United States and most other gold-using coun- 
tries. 

For additional information see Moneys of the world. 

Monetary unit. The unit of measure of the value of the 
money of a country. The gold dollar is the monetary unit 
of the United States; the pound sterling in gold is the mone- 



314 SMITH'S FINANCIAL DICTIONARY. 

tary unit of Great Britain. Also see Monetary standard ; al- 
so see Moneys of the world. 

Money. A standard of value and medium of payment es- 
tablished by law. 

In the United States the term money means gold, silver, 
nickel and bronze coins, gold certificates, silver certificates, 
Treasury notes (issued for the purchase of silver bullion un- 
der the so-called Sherman act), United States notes (green- 
backs) and National bank notes (issued by national banks). 
Other synonymous terms are cash and currency. 

The most important attribute of any form of money is its 
legal tender power, by which is meant the power conferred by 
law to discharge a debt payable in money. Gold alone pos- 
sesses by virtue of commercial usage the unlimited legal 
tender quality throughout the civilized world. The value, 
that is, the purchasing power, of gold is the same throughout 
the world. 

Money must be something the worth of which all persons 
concerned in its use recognize. Hence, it must be a commod- 
ity which there is a common desire to obtain. 

The use of gold and silver as money is as old as history, 
but cattle, tobacco, animals, skins, iron, wheat, rice, beads — 
in fact, nearly everything which people want and recognize 
the value of by general consensus of opinion has been used 
for the purpose. As civilization has grown and trading has 
become complicated everything but gold and silver has grad- 
ually dropped into disuse because gold and silver are more 
convenient. 

So, also, as between gold and silver gold has gradually 
come to be the metal which all peoples agree upon and ac- 
cept as the measure of value for other things, for even in sil- 
ver-using countries all dealings with the outside world are 
based on gold valuations. 

Originally, gold and silver passed according to weight and 
fineness, but the inconvenience of constant weighing and test- 
ing led to the device of stamping a certification of weight and 
quality on small pieces which could pass from hand to hand. 
To prevent fraud governments gradually assumed to them- 
selves the function of thus stamping or manufacturing coins 
and all that coinage of money means is that the metal has been 



SMITH'S FINANCIAL DICTION AR Y. 3 f 5 

tested, weighed and stamped or certified by government au- 
thority. The metal so stamped is no more valuable than be- 
fore except in so far as it may be more acceptable to the re- 
ceiver for reasons of convenience. 

On the other hand, in international transactions or any 
transaction involving large amounts the w^eighing process is 
more convenient than the counting of the individual pieces 
and is commonly resorted to, the certification or stamp being 
accepted as to quality. 

Thus, the original principle as to money is recognized the 
world over every day as to gold money and in silver standard 
countries as to silver money. At the same time all nations 
make use of representative money in addition to real money. 
Real money is the actual gold or silver, as the case may be, 
in which values are measured. Representative money is a 
promise to pay real money on demand and is used either for 
convenience in handling or for augmenting the supply. 

A Bank of England note or a United States gold or silver 
certificate is merely a convenience, a receipt for real money 
which is held in reserve to guarantee the fulfilment of the 
promise to pay. A United States note or a bank note is a 
promise to pay based on credit and is accepted as a substitute 
for real money only so long as confidence exists that the 
promise will be kept, or in other words, so long as the credit 
of the issuer remains good. A silver dollar is a mixture of the 
two forms. It is real money to the extent that the silver from 
which it is coined has value and it is representative money 
to the extent that confidence in the ability and good faith of 
the government to maintain it on a parity with gold causes it 
to be acceptable beyond its silver value. Minor coinage is in 
the same "class. 

An important attribute of money is its power, confirmed by 
law, to discharge debt. This is known as the legal tender 
power. In the original currency act of April 2, 1792, all gold 
and silver coins issued by the United States were made "a 
lawful tender in all payments whatsoever." It was soon 
found that the large amount of foreign coins in circulation 
provided a constant source of dispute in the settlement of 
debts and Congress was compelled from time to time to pass 
laws establishing the legal status of those coins and con- 



3i6 . SMITH'S FINANCIAL DICTION AR V. 

ferring upon them specific legal tender qualities. In 1857 
"all former acts authorizing the currency of foreign gold or 
silver coins and declaring the same a legal tender in payment 
for debts" were repealed. In 1853 the full legal tender qual- 
ity of fractional silver coins was taken away and from that 
time until the outbreak of the Civil War only full weight gold 
and silver coins were an unlimited legal tender, the circulat- 
ing notes of state banks never being able to enjoy the privi- 
lege under the Constitution. 

In 1862 Congress took a radical departure by authorizing 
the issue of United States notes which should "be lawful 
money and a legal tender in payment of all debts public and 
private within the United States" except duties on imports 
and interest on the public debt. The object of this clause was, 
of course, to keep the notes at par with gold, but it never ac- 
complished that result. Not until 1879 when the credit of the 
government was fully reestablished by the resumption of 
specie payments did United States notes pass currently at 
par. 

By the law of 1878 silver dollars were restricted in their 
legal tender quality when expressly so stipulated in the con- 
tract ; otherwise they are unlimited legal tender. Treasury 
notes of 1890 are also unlimited legal tender unless otherwise 
contracted. Gold certificates, silver certificates and bank 
notes are not a tender. Fractional silver coins and minor 
coins are a tender up to $10 and 25 cents, respectively. 

It will thus be seen that gold is the only money of absolutely 
unlimited legal tender power in the United States. The same 
may be said of gold in connection with international transac- 
tions, for, while no country can pass laws binding on another 
country, universal consensus of opinion accepts gold in pay- 
ment of all obligations. 

Also see Moneys of the world. 

For the use of the word money in speculative operations 
see For cash. 

Money article. A name given to the article in a newspaper 
that treats of the money market and the other financial mar- 
kets, including the market for stocks and bonds ; a more com- 
prehensive name and the one more often used is financial arti- 
cle. For additional information see Financial article. 



SMITH'S FINANCIAL DICTIONARY. 317 

Money-bags. A colloquial name for a rich man. 

Money broker. A dealer in coin and paper money and in 
foreign money; also one who borrows and lends money for 
others. 

The regular commission of a money broker for negotiating 
a time loan (a loan for a specified time) is 1-32 of i per cent 
of the amount borrowed or $31.25 on $100,000. The commis- 
sion is paid by the borrower.. 

A money broker receives nothing from the borrower or 
the lender for effecting a call loan. The reason is that a call 
loan may continue for a day only. The broker expects the 
free negotiation of call loans to bring business to him when 
the borrower on call becomes a borrower on time. 

Money in circulation. This term includes not only the 
money actually in circulation or in the possession of individ- 
uals, but also the money held in banks as reserve against de- 
posits. 

Money market. This is a term applied to the business of 
lending money and not to a place where money is loaned, for 
there is no specific place (in New York) for lending money. 

In New York the banks, trust companies and insurance com- 
panies are the chief lenders of money, but there are other cor- 
porations and not a few firms and individuals who are lenders. 
As in ev^ry other market supply and demand are the factors- 
which determine prices, or in other words, the rates exacted 
for the use of money. If the demand is large and the supply 
small rates are high ; if the demand is small and the supply 
large rates are low. 

Aloney is stiff w4ien it commands high rates of interest. It- 
is tight when it is difficult to obtain even at high rates ; in 
these circumstances there is a pinch or stringency in money. 
There is a squeeze in money when it cannot be borrowed ex- 
cept at exorbitant rates ; in a squeeze a premium as well as 
interest is exacted on call loans. A premium of 1-8 per cent a. 
day and interest (at the rate of 6 per cent), figuring on the 
customary basis of 365 days in a 3''ear, means a rate equal to 
52 per cent a year. 

Money of account. The money in which people keep their 
accounts — in which they reckon their transactions. It has 
been described as the money in which people do their thinkings 



3i8 SMITH'S FINANCIAL DICTIONARY. 

Money rates. Means the rates of interest at which money- 
is lending. There are different rates for call money (money 
loaned on call — that is, returnable on the demand of the 
lender) and time money (money loaned on time — that is, 
loaned for a specified period). The rates for call money are 
usually lower than those for time money. For additional in- 
formation see Call loan ; also see Time loan. 

Money scrivener. Formerly a name applied to a person 
who changed money at a prescribed rate. 

Moneys of the world. In the appended table are given in 
alphabetical order in the first column the monetary designa- 
tions of the various countries of the world ; in the second col- 
umn opposite each designation is given the name of the coun- 
try where the designation is employed ; in the third column is 
given the equivalent in another monetary designation of the 
same country ; in the fourth column is given the nominal 
equivalent in United States money, and in the fifth and last 
column is given the nominal equivalent in the money of Great 
Britain. 

Gold is the fixed and unalterable basis of values the world 
over. The United States and Great Britain are single gold 
standard countries. Therefore, the equivalents in the moneys 
of the United States and Great Britain are actual for the 
moneys of other countries which have the single gold standard 
and really adhere to it. So are the equivalents actual for the 
moneys of countries which have the double standard and 
really maintain their silver money at its legal ratio with their 
gold money. 

But the equivalents are nominal and not actual for the 
■moneys of countries which have the gold standard and do not 
really adhere to it; and the equivalents also are nominal and" 
not actual for the moneys of the countries which have the 
double standard and do not really maintain their silver money 
at its legal ratio with their gold money. 

So, too, tue equivalents are nominal and not actual for the 
moneys of countries which have the single silver standard. 
Moneys that are based on silver are depreciated; such moneys, 
also, are fluctuating in value, for the reason that silver is a 
commodity and has no fixed natural value like gold moneys, 
or moneys based on gold. 



SMITH'S FINANCIAL DICTIONARY. 



319 



Designation. 



Country. 



Equivalent 
Designation. 



Equiva- 
lent in 

United 
States 

money. 



Equivalent 

in money 

of 

Great 

Britain. 



Abassi 

Alexander 

Alphonse 

Anna 

Argentine 

At 

Bani 

Bat 

Bia 

Bolivar 

Boliviano 

Candareen (or 

fun or fen) . . . . 
Cash (or li or zin) 

Cash 

Cent 

Cent 

Cent 

Cent 

Cent 

Centavo 

Centavo 

Centavo 

Centavo 

Centavo 

Centavo 

Centavo 

Centavo 

Centavo 

Centavo 

Centesimo 

Centime 

Centime 

Centime 

Centime ........ 

Centime 

Centimo 

Centimo 

Centimo 

Centimo 

Centimo 

Chai (or pul) . . . 

Colon 

Condor 

Condor 

Copeck 

Cowry (or bia) . . 

Crown 

Crown 

Crown 

Crown 

Crown 

Crown 



Persia 

Bulgaria 

Spain 

India (British) 

Argentina 

Siam 

Roumania 

Siam 

Siam 

Venezuela 

Bolivia 

China 

China 

Korea 

Canada 

Liberia 

Newfoundland . 
Santo Domingo . 
United States. . . 

Argentina 

Bolivia 

Chile ._ 

Colombia 

Ecuador 

Mexico 

Paraguay 

Peru 

Uruguay 

Venezuela 

Italy 

Belgium 

France 

Haiti 

Switzerland . . . . 

Costa Rica 

Guatemala 

Honduras 

Nicaragua 

Salvador 

Spain 

Persia 

Costa Rica 

Chile ._ 

Colombia 

Russia 

Siam 

Austria-Hungary 

Denmark 

Germany 

Great Britain . . , 

Norway , 

Portugal 



4 chais I 

20 levs .( 3 



25 pesetas. 

4 pice 

5 pesos 

2 lots , 

i-ioo lei 

See Tical. . . 
See Cowry. , 
20 centavos . 
100 centavos, 



10 cash 

I -10 candareen. . 

i-ioo Hang 

i-ioo dollar 

i-ioo dollar 

i-ioo dollar 

i-ioo dollar 

i-ioo dollar 

i-ioo peso 

i-ioo boliviano. .. 

i-ioo peso 

i-ioo peso 

i-ioo Sucre 

i-ioo peso 

i-ioo peso 

i-ioo sol 

i-ioo peso 

i-ioo venezolano. 

i-ioo lira 

i-ioo franc 

i-ioo franc 

i-ioo gourde 

I- 100 franc 

T-ioo colon 

i-ioo peso 

i-ioo peso 

i-ioo peso 

i-ioo peso 

i-ioo peseta 

% abassi 

100 centimos. . . . 

20 pesos 

10 pesos 

i-ioo ruble 

i-ioo lot 

100 heller 

100 ore 

10 marks 

5 shillings 

100 ore 

10 milreis 



cts. 
03.40 
85.90 
82.38 
02.02 
82.38 
01.82 
00.19 



19.29 
96.47 

01.00 
00.10 

00.09 

01.00 
01.00 
01.01 
01.00 
01.00 

00.96 
00.96 
00.36 
00.96 
00.96 
00.98 
00.96 
00.96 
00.96 
00.96 
00.19 
00.19 
00.19 
00.96 
00.19 
00.46 
00.96 
00.96 
00.96 
00.96 
I00.I9 

I00.85 
I46.53 

7 1 29.98 
9 1 64. 76 

I00.5I 

i .009' 

i 20.26 
'26.79 

2I38.2I 
II2I.66 

I26.79 

I o| 80.46 



i£ 



15 
19 

19 



d. 
01.67 
10.32 
09.89 
01.00 

09.89 
00.89 
00.09 



09.51 

11-57 

00.49 
00.05 
00.04 
00.49 
00.49 
00.50 
00.49 
00.49 
00.47 
00.47 
00.17 

00.47 
00.47 
00.48 
00.47 
00.47 
00.47 
00.47 
00.09 
00.09 
00.09 
00.47 
00.09 
00.22 
00.47 
00.47 
00.47 
00.47 
00.09 
00.42 
10.95 
00.00 
08.67 
00.25 
.0044 
10999 

l|0I.2I 

9 1 09.48 
5 1 00.00 

l|0I.2I 
04I 04.85 



I 
10 
19 



320 



SMITH'S FINANCIAL DICTIONARY. 



Designation. 



Countrj^ 



Equivalent 
Designation. 



Equiva- 
lent in 

United 
States 

money. 



Equivalent 

in money 

of 

Great 

Britain. 



Crown 

Decimo 

Dime 

Dime 

Dime 

Dime 

Dime 

Dinar 

Dinero ; 

Dollar 

Dollar 

Dollar 

Dollar 

Dollar 

Doubloon 

Doubloon 

Doubloon 

Doubloon 

Doubloon 

Doubloon Isabella 

Drachma 

Ducat 

Eagle 

Escudo 

Farthing 

Fen 

Florin 

Florin 

Florin (or guild- 

er) 

Franc 

Franc 

Franc 

Fuang 

Fun 

Gourde 

Guilder 

Guinea 

Heller 

Imperial 

Kopeck 

Kran (or sahib- 

ghiran) 

Kreutzer 

Krone 

Lei 

Lepton 

Lev 

Levantine thaler 

Li 

Liang 

Liang 



Sweden 

Colombia 

Guatemala 

Honduras 

INicaragua 

Salvador 

United States. . . 

Servia 

Peru 

Canada 

Liberia 

Newfoundland . 
Santo Domingo. 
United States . . . 

Chile 

Guatemala 

Honduras 

Nicaragua 

Salvador 

Spain 

Greece 

Austria-Hungary 
United States. . . 

Chile 

Great Britain. . . . 

China 

Austria-Hungary 
Great Britain. . . . 



Netherlands . . . . 

Belgium 

France 

Switzerland . . . . 

Siam 

China 

Haiti , 

Netherlands . . . . 
Great Britain. . . , 
Austria-Hungary 

Russia 

Russia 



Persia , 

Austria-Hungary 
Same as crown . , 

Roumania 

Greece 

Bulgaria 

Austria-Hungary 



China 
China 
Korea 



100 ore 

10 centavos 

10 centimos. . . . 
10 centimos. . . . 
10 centimos. . . . 
10 centimos. . . . 

10 cents 

100 paras 

10 centavos 

100 cents 

100 cents 

100 cents 

100 cents 

100 cents 

10 pesos 

See Onza 

See Onza 

See Onza 

See Onza 

26 pesetas 

100 lepta 

(Trade money) 

10 dollars , 

5 pesos , 

I/4. penny , 

See Candareen. . 
100 kreutzers. ... 
2 shillings 



100 cents 

100 centimes. . . 
100 centimes. . . 
100 centimes. . . 

2 song peis 

See Candareen. . 
100 centimes. . . 

See Florin 

21 shillings. ... 
i-ioo crown. . . . 

15 rubles 

See Copeck. ... 



20 shahis 

i-ioo florin 

See Crown 

100 bani 

I- 100 drachma. ., 

100 stotinki 

See Marie The- 
resa thaler. . . . 

See Cash 

See Tael 

foo cash 



cts. 

26.79 
09.64 
09.6,^ 
09.64 
09.64 
09.64 

10.00 
19.29 
09.64 
00.00 
00.00 

01.38 

00.00 
00.00 

64.99 



01.67 

19.29 
28.78 

00.00 

82.49 

00.50 

40.52 
48.66 

40.19 
19.29 
19.29 
19.29 

07.27 

96.47 
10.98 

00.20 



17.04 

00.40 

19.29 

00.19 

19.29 



'09.96 



£ 



4 
4 
4 
4 
4 
15 



d. 
01.21 
047s 
0475 
0475 

047.'i 
0475 
04.93, 
09.51 

0475 
01.31 
01.31 
02.00 
01.31 
01.31 
00.00 



00 07.41 
09.51 
04.83 
01.16 
06.00 
00.25 



9 

01 

7 



01 
II 



07.98 
00.00 

19.82 
09.51 
09.51 
09.51 

03-55 

11-57 

00.00 
00.09 
08.59 



08.40 
00,19 

09-51 
00.09 

09.51 



04.91 



SMITH'S FINANCIAL DICTIONARY. 



321 



Designation. 



Country. 



Equivalent 
Designation. 



Equiva- 
lent in 

United 
States 

money. 



Equivalent 

in money 

of 

Great 

Britain. 



Libra 

Lira 

Lira (or pound 
or medjidie) . . 

Lot 

Louis 

Mace (or tsien) 
Mahbub 



Peru 
Italy 



Turkey 
Siam . 
France 
China . 
Tripoli 



Austria-Hungary 

Germany 

Finland 

Ecuador 

Turkey 

Brazil 

Portugal 

India (British) . . 

France 

Egypt 



Marie Theresa (or 
Levantine) tha- 
ler 

Mark 

Markkaa 

Medio real 

Medjidie 

Milrei 

Milrei 

Mohur 

Napoleon 

Ochr-el-guerche . 

Onza (or doub- 
loon) I Guatemala 

Onza (or doub- 
loon) (Honduras 

Onza (or doub- 
loon) (Nicaragua 

Onza (or doub-| 
loon) I Salvador 

Onza (or doub-| 
loon) 

Ore 

Ore 

Ore 

Para 

Para 

Penebat 

Penni 

Penny 

Peseta 

Peseta 

Peso , 

Peso , 

Peso 

Peso 

Peso 

Peso 

Peso 

Peso 

Peso 

Peso 

Peso 

Pfennig 



10 soles 

100 centesimi, 



100 piasters. . . . 

^ at 

20 francs 

10 candareen. . . 
20 piasters Tur- 
kish 



Spain 

Denmark . . . 

Norway 

Sweden 

Servia 

Turkey 

Persia 

Finland 

Great Britain 
Ecuador .... 

Spain 

Argentina . . . 

Chile 

Colombia . . . 
Guatemala . . 
Honduras . . . 

Mexico 

Nicaragua . . 
Paraguay . . . 
Salvador . . . . 
Uruguay 



I- 100 crown. . . ... 

i-ioo crown 

i-ioo crown 

i-ioo dinar 

1-40 piaster 

10 shahis 

I- 1 00 markkaa. .. 

4 farthings 

20 centavos 

100 centimos. . . . 

100 centavos 

100 centavos 

100 centavos 

100 centimos. . . . 

100 centimos. . . . 

100 centavos 

100 centimos. . . . 

100 centavos. . . . 

100 centimos. . . . 

100 centavos. . . . 

Venezuela (See Venezolano. 

Germany |i-ioo mark 



(Trade money) . 

100 pfennigs 

100 penni 

5 centavos 

See Lira 

1,000 reis 

1,000 reis 

15 rupees 

20 francs ,. 

i-io piaster 



cts. 
86.65 
19.29 

3964 
00.90 

85.90 
10.00 

87.92 



01.31 
23.82 
19.29 
04.87 

54-63 

08.04 

86.65 
85.90 

00.49 

73.89 
7389 
7389 
73.89 
73.89 

00.26 
00.26 
00.26 
00.19 

00.01 

08.52 

00.19 

02.02 

09.73 
19.29 
96.47 
36.49 
96.47 
96.47 
96.47 
98.39 
96.47 
96.47 
96.47 
03.42 

00.23 



£ 



I ci. 
00.00 

09.51 



i8ioo.8o 
00.44 
10.32 
04.93 

07.36 



01.96 
11.74 
09.51 
02.37 



2 

4 
00 

15 



04 
04 
04 
04 
04 



02.93 

05.28 
00.00 
10.32 
00.24 

08.24 

08.24 

08.24 

08.24 

08.24 
00.12 
00.12 
00.12 
00.09 
.005 
04.20 
00.09 
01.00 
04.86 
09.51 

11-57 
06.00 

11-57 
11.57 
11.57 
00.52 

11-57 
11-57 
11-57 
03.00 

00.11 



322 



SMITH'S FINANCIAL DICTIONARY. 



Designation. 



Country. 



Eqtiivalent 
Designation. 



Equiva- 
lent in 
United 
States 
monej'. 



Equivalent 

in money 

of 

Great 

Britain. 



Piaster 

Piaster 

Pice 

Pie 

Pound 

Pound 

Pound 

Pul 

Quadruple (or 

onza) 

Real 

Real 

Real 

Rei 

Rei 

Reichsmark 

Rin 

Rixdaler 

Ruble 

Rupee 

Sahibghiran 

Salung 

Sen 

bhahi 

Shilling 

Sol 

Song peis 

Sou 

Sovereign 

Stiver 

Stotinki 

Sucre 

Tael (or Hang) . . 

Tamling 

Thaler 

Tical (or bat) . . . 
Toman 

Tsien 

Venezolano (or 

peso) 

Yen 

Zin 



Egypt 



Turkey 

India (British) 
India (British) 
Egypt ......... 

Great Britain. . 

Turkey 

Persia 



Spain 

Ecuador 

Paraguay 

Spain 

Brazil 

Portugal 

Same as mark. 

Japan 

Netherlands . . 
Russia 



India 

Persia 

Siam 

Japan 

Persia 

Great Britain. 

Peru 

Siam 

France 

Great Britain. 

Netherlands . 

Bulgaria 

Ecuador 

China 

Siam 

Germany . . . . 

Siam 

Persia 

China 



Venezuela 
Japan . . . 
China . . . 



10 ochr-el-guer- 

che 

i-ioo lira 

3 pie._ 

1-3 pice , 

100 piasters 

20 shillings 

See Lira 

See Chai 



10 centavos. 



1-1,000 milrei. . . 
1-1,000 milrei. . . 

See Mark 

i-io sen. . , 

2^^ florins 

100 copecks 

i6 annas 

See Kran 

2 f uango 

i-ioo yen 

1-20 kran 

12 pence 

100 centavos 

2 ats 

5 centimes 

I pound, or 20 

shillings 

1-20 florin 

i-ioo lev 

100 centavos. . . . 

10 mace 

4 ticals 

3 marks 

4 salungo 

10 kran (50 abas-1 

si) i 

See Mace I 



15 



cts. / U I s. 



00.49 

04-39 
00.50 
00.16 
94-30 
86.65 



73-89 
09.64I 
12.05 1 
12.05 1 
.005/1 
00.01 

.049 
00.48 
51-45 
32.44 

14-54 
00.49 
00.85 

24-33 
96.47 

03.63 
00.96 



4.86.65 
1 02.09 
I00.19 

1 96.47 
1 1 00.00 

2I32.72 
71-46 
I58.18 

I 

T 170.40 



100 centavos | J96.ZI.7 

100 sen < I49.84 

See Cash I 



00 
00 



00.24 
02.16 
00.24 
00.08 

03-77 
00.00 



04 1 08.24 
04.75 
05-94 
05-94 
.0027 
.005 



00 



.024 

01.55 
01.37 
04.00 

07.11 
00.24 
00.42 
00.00 
11.78 
01.78 
00.47 

00.00 
00.99 
00.09 

11-57 
01.31 
05.78 
11.24 
04.44 



6 08.40 



3|ii-57 
2|oo.s8 



SMITH'S FINANCIAL DICTIONARY. 



323 



The following tables show the equivalents of the units of 
gold-using countries in each other : 

EQUIVALENTS IN GOLD UNITS. 



Egypt. 
Pound. 



Great Britian. 
Pound. Pence. 



Turkey. 
Pound. 



Porttigal. 
Milrei. 



Egypt ......... 

Great Britain. . . 

Turkey 

Portugal 

Uruguay 

United States.., 

Argentina 

Brazil 

Russia 

Japan 

Netherlands . . . . 

Chile .......... 

India (British) . 
Scandinav'n Un. 

Germany 

Austria-Hung'y 
Latin Union. . . . 



1. 000000 
.9845219 



.2185826 
.2092301 
.2023033 
.1951748 
.1104913 
.1040834 
.1008403 
.0813176 
.0738391 
.0656348 
.0542152 
.0481912 
,0409920 
.0390350 



1.015721 
1. 000000 

•9033491 
.2220191 
.2125195 
.2054838 
.1982433 
.1122284 
.1057198 
.1024257 
.0825961 
.0749999 
.0666667 
.0550676 
.0489489 
.0416365 
.0396487 



243-773 

240.000 

216.804 

53.285 

51.005 

49.316 

47.578 
26.935 
25-373 
24.582 
19.823 
18.000 
16.000 
13.216 
11.748 
9-993 
9.516 



1. 124395 
1. 1 06992 
1. 000000 
0.2457733 

.2352574 
.2274689 

.2194537 
.1242359 
.1170309 

.1133844 
.0914332 
.0830243 

•0737995 
.0609594 

.0541860 

.0460912 

.0438907 



4.574929 
4.5041 18 
4.068791 
1. 000000 
0.9572129 

0.9255233 
.8929110 

.5054899 
.4761744 

.4613374 
.3720225 
.3378086 
.3002745 
.2480308 
.2204715 

.1875355 
.1785822 



Uruguay. 
Peso. 



United 
states. 
Dollar. 



Argentina. 
Peso. 



Brazil. 

Milrei. 



Russia. 
Ruble. 



Egypt . . . . . 

Great Britain. . . 

Turkey 

Portugal 

Uruguay 

United States. .. 

Argentina 

Brazil 

Russia 

Japan 

Netherlands .... 

Chile 

India (British) . 
Scandinav'n Un. 

Germany 

Austria-Hung'y 
Latin Union. . . . 



4.779427 
4.705450 
4.250664 
1.044700 
1. 000000 
0.9668939 
.9328239 
.5280851 
.4974592 
.4819590 

.3886517 
•3529085 
.3136967 
.2591177 
.2303265 
• 1959183 
.186^648 



4-943073 
4-866563 
4.396206 
1.080470 
1.034240 
1. 000000 
0.9647634 
.5461666 
.5144920 
.4984611 
.4019590 
.3649920 
.3244376 
.2679898 
.2382128 
.2026265 
.1929527 



5.123611 
5.044307 
4-556770 
I.I 19932 
1. 072014 
1.036524 
1. 000000 
0.5661 145 
.5332831 
.5166667 
.4166400 
.3783228 
.3362872 
.2777778 
.2469132 
.2100271 
.2000000 



9.050485 
8.910401 
8.049202 
1.978279 

1.893634 
1.830943 
1.766427 
1. 000000 
0.9420056 
.9126539 

.7359641 
.6682795 
.5940267 
.4906742 
.4361541 
.3709975 
•3532854 



9.607676 
9.458968 
8.544750 
2.100071 
2.010215 
1-943665 
1. 875 1 77 
1. 061 565 
1. 000000 
0.9688413 
.7812736 
.7094220 
.6305978 
.5208824 
.4630059 
.3938379 
-3750353 



Continued on next page. 



324 



SMITH'S FINANCIAL DICTIONARY. 



EQUIVALENTS IN GOLD UNITS. 
Continued from preceding page. 



Japan. 
Yen. 



Netherlands 

Guilder or 

Florin. 



Chile. 
Peso. 



India. 
(British). 
Rupee. Annas. 



Egypt ......... 

Great Britain. . , 

Turkey 

Portugal 

Uruguay 

United States. . 

Argentina 

Brazil 

Russia 

Japan 

Netherlands ... , 
Chile .......... 

India (British). 
Scandinav'n Un 

Germany 

Austria-Hung'y 
Latin Union . . . , 



9.916666 

9763175 

8.819555 

2.167611 

2.074865 

2.006174 

1.935484 

1.095706 

1.032161 

1 .000000 

0.8064000 

0.7322376 

0.6508784 

0-5376344 
0.4778965 
0.4065041 
0.3870968 



12.29745 
12.10711 
10.93695 
2.688010 
2.572998 
2.487816 
2.400154 
1.358762 
1. 279961 
1.240079 
I 000000 
0.9080328 
0.8071409 
0.6667094 
0.5926296 
0.5040973 
0.4800307 



13.54296 

12.04466 
2.960256 
2.833596 
2.739786 
2.643246 
1.496380 
1.409598 
1.3656769 
1.101282 
1. 000000 



o. 

0.7342349 

0.6526522 

0.5551532 

0.5286491 



15.23582 
15.00000 
13.55024 
3.330286 

3.187793 
3.082257 

2.973649 
1.683426 

1.585797 
1.536385 
1. 238941 
1. 124999 
1. 000000 
0.8260136 
0.7342332 
0.6245469 
0.5947298 



243-773 

240.000 

216.804 

53.285 

51.005 

49.316 

47-578 

26.935 

25.373 

24.582 

19.823 

18.000 

16.000 

13.216 

11.748 

9-993 

9.516 



Scandina- 
vian Union. 
Crown. 



Germany. 
Mark. 



Austria- 
Hungary. 
Crown. 



Latin Union. 
Franc. 



Egypt 

Great Britain 

Turkey 

Portugal 

Uruguay 

United States 

Argentina 

Brazil 

Russia 

Japan 

Netherlands 

Chile 

India (British) 

Scandinavian Union. 

Germany 

Austria-Hungary . . , 
Latin Union 



18 
16 

4 

3- 

3- 

3- 

2. 

I. 

I. 

I. 

I. 

I. 

I. 

o. 

0. 

o. 



44500 
1 595 1 
40437 
031757 
859250 

731485 
600000 
038012 
919819 
860000 

499904 

361962 

210634 

000000 

8888875 

7560976 

7200000 



20.75066 
20.42948 
18.45495 
4-535733 
4.341662 
4.197927 
4.050006 
2.292767 
2.159800 
2.092503 

1.687395 
1. 532210 
1. 361 965 
1. 1 25002 
1. 000000 
0.85061 1 1 
0.8100012 



24.39500 
24.01741 
21.6961 1 

5-332323 
S-104169 

4-935189 
4.761290 
2.695436 
2.539116 
2.460000 
1.983744 
1.801305 
1.601161 
1.322581 
1. 1 75625 
1. 000000 
0.9522581 



25.61806 
25.22154 
22.78385 
5.599662 
5.360069 
5.182618 
5.000000 
2.830573 
2.666415 

2.583333 
2.083200 
1.891614 
1. 68 1 436 
1.388889 
1.234566 
1.050136 
1. 000000 



Following are the monetary standards (or standards of 
value) and monetary units of the various countries of the 
world : 



Countr^^. 

Argentina 

Austria-Hungary , 

Belgium 

Bolivia 

Brazil 

British Possessions in North Amer 

ica (except Newfoundland) 

Bulgaria 



standard. 



Monetary unit. 



Gold 

Gold 

Gold 

Silver 

Gold 

Gold 
Gold 



Peso 

Crown 

Franc 

Boliviano 

Milrei 

Dollar 
Lev 



SMITH'S FINANCIAL DICTIONARY. 



325 



Country. 

Central American States 

Costa Rica 

British Honduras 

Guatemala 

Honduras 

Nicaragua 

Salvador 

Chile , 



standard. 



Monetary unit. 



China 



Gold I Colon 

Gold iDollar 

1 
I 
Silver .IPeso 



Colombia 

Cuba 

Denmark 

Ecuador 

Egypt 

Finland 

France 

Germany 

Great Britain . . , 

Greece 

Haiti 

India (British) 

Italy 

Japan , 

Korea 

Liberia , 

Mexico 

Netherlands . . . 
Newfoundland 

Norway 

Paraguay 

Persia 

Peru , 

Portugal 

Roumania 

Russia 

Servia 

Siam 

Spain 

Sweden 

Switzerland . . . 

Turkey 

United States . 

Uruguay 

Venezuela 



L 
Gold 



Silver 



Silver 

Gold 

Gold ...... 

Gold 

Gold 

Gold 

Gold 

Gold 

Gold 

Gold 

Gold 

Gold Pound 

Gold Lira 

Gold Yen 

Silver jLiang 

Gold IDollar 

Silver iPeso 

Gold I Florin 

Gold IDollar 

Gold I Crown 

Silver |Peso 

Silver jKran 

Silver I Sol 

Gold iMilrei 

Gold I Lei 

Gold iRuble 

Gold iDinar 

Silver Tical 

Gold Peseta 

Gold Crown 

Gold Franc 

Gold Piaster 

Gold IDollar 

Gold iPeso 

Gold iBolivar 



Peso 

f Amoy 
Canton 
Chefoo 
Chin Kiang 
Fuchau 
Haikwan 
(Customs) 

Tael \ Hankow 

Hongkong 
Niuchwang 
Ningpo 
Shanghai 
Swatow 
Takau 
^ Tientsin 

Peso 

Peso 

Crown 

Sucre 

Pound (100 piasters) 

Markkaa 

Franc 

Mark 

Pound sterling 

Drachma 

Gourde 

sterling 



326 



SMITH'S FINANCIAL DICTIONARY. 



Following is a description of the monetary systems of the 
world. The calculations as to the values of the different 
moneys are, with few exceptions, those of the Bureau of the 
Mint in the Treasury Department of the United States, and 
where the compilation of the Bureau of the Mint has been 
supplemented the same basis of calculation was employed. 
In the calculations the gram is taken at 15.43235639 grains. 
The other facts as to the various monetary systems likewise 
are largely from the compilation of the Bureau of the Mint. 

ARGENTINA. 

While formally adopting thfe double standard the Argentine law 
of 1881 restricted the coinage and use of silver as legal tender and 
the metallic standard may therefore be said to be gold. The actual currency 
is depreciated paper, which fluctuates greatly in value. Gold is quoted at 
so much premium; for instance, 180 premium means $280 paper to $100 
gold. Gold coins are full legal tender. Silver coins are legal tender only 
to the amount of 10 pesos and bronze coins to the amount of i peso. 

The weight, fineness, etc., of the coins of Argentina are as follows : 



GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
Weight 


Weight. 


llll Value in 
^^if United States 
ta'ned. gold coin. 


1 Grams. \ l,000tlis Grains. Grains. 

Argentine 1 8.0645 1 900 7.2580 124.4542 

Half argentine | 4.0322I 900 3.6290 62.2271 


Graitts. \ 
1 1 2.0088 1 $4.8238 
56.OO44I 2.41 19 



STIVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



I Grams. \ l,000ths | Grams. 

Peso I25.0000I 900122.5000 

50 centavos I12.5000I 900I 11.2500 

20 centavos I 5.0000I 900] 4.5000 

10 centavos | 2.5000] 900] 2.2500 

5 centavos | 1.2500] 900] r.1250 



Grains. I Grains. \ 

385.8089I347.2280I $0.9352 

I92.9O44I173.6140I .4676 

77.1617I 69.4456I .1870 

38.5808I 347228I .0935 

I9.2904I 17-36141 -0467 







MINOR COINS. 






Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 


Grams. 




Grains. 






20 centavos.. . 


4.0000 


75 per cent cop- 


\ 61.7294 




$0.1929 


10 centavos.. . 


3.0000 


s' per, 25 per cent 
nickel. 


\ 46.2970 




.0964 


5 centavos .... 


2.0000 


30.8647 


To the 


.0482 










\ amount 




Bronze. 




r95 per cent cop- 




of I peso. 


1 


2 centavos.. . . 


10.0000 


per, 4 per ceni 


154-3235 




.0192 


I centavo. . . . 


5.0000 


tin, and i per 
cent zinc. 


^ 77.1617 




.0096 



SMITH'S FINANCIAL DICTIONARY. 



327 



AUSTRIA-HUNGARY. 

The new monetary system of Austria-Hungary is gold monomet- 
allic; the gold crown of 100 hellers (farthings) is the monetary unit. 
The new currency consists of gold, silver, nickel and bronze coins. The 
gold coins provided for are the 20-crown piece and the lo-crown piece. 
Besides these gold coins there are to be coined as heretofore, as trade coins, 
Austrian gold ducats. 

The new silver coin is the i-crown piece. The ratio of gold to sub- 
sidiary silver in the new system is i to 13.69. Silver is coined only on 
account of the state. Silver coins are unlimited legal tender to the state at 
their nominal value ; to private parties to the amount of 50 crowns. The 
Levantine or Maria Theresa silver thalers continue to be stamped as trade 
coins. 

The coins of the new system, multiplied by two, are of the same value 
as the pieces of the old silver and paper currency, i silver or paper florin 
being equal to 2 crowns and i kreutzer to 2 hellers. 

The weight, fineness, etc., of the coins of Austria-Hungary are as 
follows : 

GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



20-crown piece 
lo-crown piece 
4 ducats. . . . . . 

I ducat 



I Grams. 
I 6.7750 
I 3-3875 . 

113-96361 986 i 
3.4909 1 986^ 



l,000ths i 
900 1 
900! 



Grajns. \ Grai?is. \ Grains. 

6.097:; ii04.s.y52| 94-0997 

3.0487I 52-2776I 47-0498 

13.7696l21s.4912l212.4983 

3.4424I 53-8728I 53-1245 



$4-0525 
2.0262 

9-1515 
2.2878 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 

con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



5-crown piece 

l-crown piece 

Marie Theresa thaler 

(Levantine) 

2 florins 

I florin 

Quarter florin 

20 kreutzers 

10 kreutzers 



Grams. 

24.0000 

5.0000 

28.0668 

24.6914 

12.3457 

5-3419 

2.66661 
1.6666! 



,000ths 


Grams. \ 


900 


21.6000 


835 


4-1750 


833i 


23.3890 


900 


22.2222 


goo 


II. nil 


520 


-2-7711 


500 


1-3333 


400 


.6666 



Grams. \ Grains. 
370-37651333-3388 
77.1617' 6-L.43OO 

! 

433-1368I360.9473 

381.0462i342.9416 

190.5231 1 171.4708 

82.4381! 42.8678 

41.1529 20.5764 

26.72051 10.2882 



$0.8978 
-1735 

.9722 
•9237 
.4618 

•1154 
.0554 
.0277 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 












20 hellers. . . . 
10 hellers. . . . 


Grains . 
4.0000 
3.0000 


J- Pure nickel 


Grains. 
) 61.7294 
1 46.2970 


1 To the 
f amount 
of 10 
crowns. 


( $0.0405 
( .0202 


Bronze. 












2 hellers 

I heller 


3-3333 
1.6666 

1 


' 95 per cent cop- 
J per, 4 ner cent 
1 tin, and i per 
i cent zinc. 


1 

j.51-4411 
1 25.7205 

J 


1 On public 
account 
10 crowns i 

- and ■ pri- \ 
vate ac- 
count I 

\ crown. 


1 

.0040 
.0020 



3^8 



SMITH'S FINANCIAL DICTIONARY. 



The. 



BELGIUM. 

For general information as to the money of Belguim see Latin Union, 

The weight, fineness, etc., of the coins of Belgium are as follows : 

GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


100 francs 


Grains. 
32.2580 
16.1290 
6.4516 
3.2258 
I.6129 


l.OOOths 
900 
900 
900 
900 
900 


Grains. 
29.0322 

I4.c;i6i 
5.8064 
2.9032 
1.4516 


Grains. 
497.8178 
248.9089 
99.5635 
49.7817 
24.8908 


Grains. 
448.0360 
224.0180 
89.6072 
44.8036 
22.4O1S 


$19.2952 

9.6476 

3.8590 

1-9295 

.9647 


50 francs 


20 francs 


10 francs 


t^ francs 





SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 

silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



5 francs . . . 
2 francs . . . 
I franc. . . . 
50 centimes 
20 centimes 



Grams. 
25.0000 
10.0000 

5.0000 
2.5000 

1. 0000 



l,000ths I Grams. 
9O0I22.5OOO 
835 1 8.3500 
8351 4-1750 
8351 2.0875 
835 1 0.8350 



Grains. 
385.8089 

154-3235 
77.1617 
38.5808 
15.4323 



Grains. 
347.2280 
128.8601 
64.4300 
32.2150 
12.8860 



$0.9352 
.3470 
•1735 
.0867 
.0347 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 


Grams. 




Grains. 






20 centimes. . 


7.0000 


\ 75 per cent cop- 


, 108.0264 


^ To the 
\ amount 

J of 5 


r $0.0385 


10 centimes. . 


4.5000 


l per and 25 per 


\ 69.4456 


\ .0192 
^ .0096 


5 centimes . . . 


3.0000 


' cent nickel. 


f 46.2970 










francs. 




Copper. 












2 centimes . . . 


4.0000 


\ Pure copper 


j 61.7294 


j To the 


j .0038 
1 .0019 


I centime.... 


2.0000 


' 30.8647 


f amount of 










2 francs. 





BOLIVIA. 

Bolivia has the single silver standard and the money of account 
is the boliviano or silver peso. The real monetary unit is the 20-centavo 
piece and all transactions are conducted on that basis. The banks redeem 
their notes in no other coin and exchange on Europe is based on it. 

The weight, fineness, etc., of the silver coins of Bolivia are as follows : 

SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Boliviano . 
50 centavos 
20 centavos 
10 centavos 
5 centavos. 



Grams. I 
25. 0000 1 
1 2. 5000 1 
4.50001 
2.2500I 
I.I250I 



l.OOOths I Grams. 
900122.5000 
900I 1 1.2500 
900 1 4.0500 
900 1 2.0250 

900 1 1. 01 25 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



Grains. \ Grains. 



385.8089 

192.9044 

69.4456 

34.7228 

17.3614 



347.2280 

173.6140 

62.5010 

31.2505 
15.6252 



$0.9352 
.4676 
.1683 
.0841 
.0420 



SMITH'S FINANCIAL DICTIONARY. 



329 







MINOR COINS. 






Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 
10 centavos 


Grains. 
5.0000 
2.5000 

10.0000 

5.0000 


) 75 per cent cop- 

r per and 25 per 

cent nickel. 

95 per cent cop- 
j per, 4 per cent 
1 tin, and i per 
cent zinc. 


Grains, 

\ 77-1617 
\ 38.5808 

) 154-3235 
j" 77-1617 




$0.0964 
.0482 

.0096 
.0048 


5 centavos .... 

Bronze. 

I centavo .... 
Half centavo 











BRAZIL. 

Brazil has the gold standard. At the mint par between Brazil and 
England i milrei equals 26.93 pence, which makes the piece of 20 mil- 
reis worth £2 4s. lod. The silver money is not legal tender beyond 20 
milreis. The republic sanctioned large issues of paper money by banks, 
in consequence of which the milrei constantly fluctuates. One thousand 
milreis is called a conto; 1,000 contos a conto de contos. 

The weight, fineness, etc., of the coins of Brazil are as follows: 

GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


20 milreis 

10 milreis 


Grams. 

17.9296 
8.9648 
4.4824- 


l,000ths 
917 
917 
917 


Grains. 

16.4415 
8.2207 
4.IIO3 


Grains. 
276.6973 
138.3486 

69.1743 


Grains. \ 
253.7314I $10.9273 
126.86571 k.a6i6 


5 milreis . 


63.4328 


1 2.7318 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



i Grams. I l,000ths Grams. \ Grains. \ Grains. \ 

2 milreis I25.5000I 917 23.3835I393.5250I360.8625I $0.9720 

Milrei I12.7500I 917I11.6917I196.7625I180.4312I .4860 

500 reis I 6.3750I 917I 5-84581 98-38121 90-2i56| .2430 

MINOR COINS. 



Denomination. Weight 



Nickel. 

200 reis . , 
100 reis.. 
50 reis.. . 

Bronze. 

40 reis.. . 
20 reis... 
10 reis.. . 



Grams. 

15.0000 

10.0000 

7.0000 



12.0000 
7.0000 
3.5000 



Composition. 



1 75 per cent cop- 
\ per, 25 per cent 
j nickel. 



95 per cent cop- 
per, 4 per cent 
tin, and i per 
cent zinc. 



Weight. Legal tender. Value. 



Grains. 
{231.4853 
1 154.3235 
1^108.0264. 



r 185.1882 

108.0264 

^ 54-0132 



1 To the 
i- amount of 
j I milrei. 



>, To the 
^amount 
J 200 reis. 



of 



f $0.1092 
\ -0546 
t .0273 



.0218 
.0109 
.U054 



330 



SMITH'S FINANCIAL DICTIONARY. 



BULGARIA. 

Bulgaria has the double standard. The silver coins are the same as 
those of France. Foreign gold coins have been officially rated as follows : 



Levs. 

Sovereign 20.00 

20 German marks 24.50 

20 francs 20.00 



Levs. 

Old imperial.. 20.50 

Turkish pound 22.70 

Austrian ducat 11.60 



The weight, fineness, etc., of the coins of Bulgaria are as follows 

GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


1 Grains. \ l.OOOths | Grams. Grains. 

Alexander (20 levs)..| 6.4516 900 5.8064 99.5635 


Grains. 
89.6071 


$3.8590 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 

con- 
tained 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



5 levs . . . 
2 levs. . . 
I lev. . . . 
Half lev. 



Grams. \ 

25.OOO0I 

10. 0000 1 

5. 0000 1 

2. 5 000 1 



,000ths 
900 

835 
835 
83? 



Grains. \ Grains. 
22.5OO0I385.8089 
8.35O0I 154.3235 
4.17501 77.1617 
2.0875 1 38.5808 



Grains. 

347.2280 

128.8601 

64.4300 

32.2150 



$0.9352 
•3470 

•1735 
.0867 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 
20 stotinki . . . 


Grams. 
5.0000 
4.0000 
3.0000 
2.0000 




Grains. 

77.i6iy 

61.7294 
46.2970 
30.8647 




$0.0385 
.0192 
0096 


10 stotinki. . . 






5 stotinki. . . . 
2^2 stotinki. . 










0048 









CANADA. 

The Dominion of Canada has the gold standard, based upon the 
legal value of the pound sterling, equal to $4.86.65, or $1 equal to 
49.316 pence. The country has no gold coin of its own; silver is legal 
tender to the amount of $10 and bronze coins to the amount of 25 cents. 

The value of the English coins in circulation has been officially fixed 
as follows: Crown or 5 shillings, $1.20; one-half crown or 2 1-2 shillings,. 
$0.60; florin or 2 shillings, $0.48; shilling, $0.24; one-half shilling, $0.12. 

The weight, fineness, etc., of the silver coins of Canada are as follows : 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



50-cent pieces. 
25-cent pieces, 
lo-cent pieces. 
5-cent pieces. , 



1 Grains. 


l.OOOths Grams. 


11.6200 


925 10.7485 


5.8100 


925 5-3742 


2.3240 


925 2.1497 


1. 1620 


925 1.0748 



Grains. \ Grains. \ 

179-32391 165-87461 $0.4468 

89.661 9I 82.9373 1 .2234 

35-8647I 33-I749I -0893 

1 7.9323 1 16.5874I .0446 



SMITH'S FINANCIAL DICTIONARY. 



331 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 

British half- 
penny 


Grains. 
5.6699 


95 per cent cop- 
per, 4 per cent 
tin, and i per 
cent zinc. 


Grains. 
87.5000 


To the 
amount of 
I shilling 
or 25 cents. 


$0.0101 



Also see Newfoundland. 



CHILE. 



Chile has the gold standard and the monetary unit is the gold 
pesOj although no provision is made for the minting of this coin. The 
condor is worth 20 pesos, the doubloon 10 and the escudo 5. The English 
and Australian pound sterling have legal circulation in Chile at the rate of 
13 1-3 pesos. Gold is full legal tender. Silver is legal tender to the amount 
of 50 pesos between individuals, but full legal tender to the government. 
The mint is required to exchange gold for silver pesos tendered to it for 
that purpose. 

The weight, fineness, etc., of the coins of Chile are as follows : 

'gold. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


-Pure - 

gold 

con- 
tained. 


Valtie in 

United States 

gold coin. 


Condor 


Grains. 

11.9820 

5.9910 

2.9955 

•5991 


l,OO0tlis 
916I 
916I 
916I 
916I 


Grams. 

10.9835 

5.4917 

2.7458 

•■^491 


Grains. 
184.91 15 

92.4557 
46.2278 

9.2455 


1 Grains. 

169.5022 

84.7511 

42.3755 

8.4751 


$7.2998 

3.6499 
1.8249 

•3649 


Doubloon 


Escudo 


Peso (not coined) .... 



SILVER. 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



Peso 

20 centavos 
10 centavos 
5 centavos 



Grams. 


l,000ths 


Grams. 


1 Grains. 


Grains. 


20 


835 


16.7000 


308.6471 


2577203 


4 


835 


3.3400 


61.7294 


51-5440 


2 


835 


1.6700 


30.8647 


25.7720 


I 


8-^=; 


•8350 


15-4323 


12.8860 



$0.6941 

.1388 

.0694 

-0347 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Copper. 

2 centavos .... 
T cpntavo 


Grams. 
7.0000 
5.0000 
3.0000 


1 95 per cent cop- 
!- per and 5 per 
J cent nickel. 


Grains. 

r 108.0264 

-!' 77-1617 
1 46.2970 




$0.0072 
.0036 
.0018 


y2 centavo .... 





33^ 



SMITH'S FINANCIAL DICTIONARY. 



CHINA. 

The money of account in China is as follows : lo cash or li, i 
candareen; lo candareens or fun or fen, i mace; lo mace or tsien, i tael 
or Hang. The smallest piece of money, the cash or li (called also zin and 
by the Dutch pitjes), is represented by an actual coin, whereas the canda- 
reen, the mace and the tael are simply designations for weights of silver. 
The cash or li is made from an alloy of copper, iron and tin. It is a cir- 
cular bit of metal seven-eighths of an inch in diameter with a square hole 
in the middle around which are impressed on the obverse Chinese char- 
acters, stating the reign, etc. ; on the reverse Mantchu characters stating 
the name of the mint. Originally it represented one-thousandth part of a 
tael and nominally it continues to do so, but it long since ceased to keep 
up a corresponding actual metallic value. 

The monetary unit is the tael. The Canton tael in Shanghai is a quan- 
tity of silver -of the fineness of the Mexican dollar (about 0.89.8), and 
weighing a tael, which would make i money tael equal $1.39.37 and $100 
equal 71.7517 money taels. /\t Shanghai foreign accounts are kept and 
the quotations are given in taels. Generally, when converting taels into 
dollars, $100 are taken to equal 71.7 taels or i tael equals $1.39.5. Besides 
the Canton tael weight (37.573 grams) there is the haikwan tael or govern- 
ment tael, which weighs 590.35 grains (38.246 grams) or 2 per cent more 
than the Canton tael (100 Canton taels equal 98 haikwan taels). At 
Shanghai there is another tael weight about 2 1-2 per cent lighter than the 
Canton weight, 36.56 grams (564.20 grains troy). It is used as weight for 
gold. 

There are several local taels at the various ports in China differing 
greatly in value as compared with the haikwan or government tael. The fol" 
lowing are the approximate values at the treaty ports : 



Ports. 



Amoy .... 
Chefoo . . . 
Chinkiang 
Foochow , 
Hankow . 
Hoihow . . 
Ichang . . , 
Kiukiang , 
Newchwan 



Local 


Haik- 


taels. 


wan 
taels. 


101.75 


100 


106.40 


100 


IO4.T6 


100 


110.00 


100 


108.75 


100 


113.76 


100 


109.65 


100 


104.37 


100 


108.50 


100 



Ports. 



Ningpo . 
Pakhoi . 
Shanghai 
Swatow 
Takow . 
Tamsui . 
Tientsin , 
Wenchow 
Wuhu .., 



Local 
Taels. 



105.83 

110.57 
III 40 
IIO.15 
lOI.II 
1 1 1.32 
105.00 
103.00 
104.16 



Haik- 

wan- 
taels. 



TOO 
100 
TOO 
100 
100 

roo 

100 
100 
100 



In large native transactions ingots of silver are used. These are called 
shoes from their resemblance to a shoe in shape. They range in weight 
from a half tael to 100 taels. The Shanghai currency consists of such 
shoes of silver of about 50 taels weight each. These ingots are rendered 
current by the hong koo, who assays the metal and affixes to each ingot 
assayed by him a stamp recording its touch or degree of purity. The hong 
koo is not an official appointed by the Chinese government, but derives his 
authority from an arrangement with the native bankers. According to the 
stamp affixed by him on each shoe the compradores (native commission 



SMITH'S FINANCIAL DICTIONARY. 333 

merchants and intermediaries for foreign business houses) add from o up 
to 3 taels Shanghai weight per 50 taels of actual weight. This addition 
thus ranges from o for silver of the hong koo's standard up to 6 per cent 
for pure silver of 100 toques or touch. [The Chinese report the fineness of 
the precious metals by dividing the weight into 100 parts, called toques or 
touch — 98 touch means, accordingly, that the gold or silver ingot, etc., 
contains 98 parts of pure metal and 2 parts of alloy]. A further addition 
of 2 per cent is made in conformity with a custom of long standing. 

The so-called haikwan (i. e., customs) sycee (sycee silver), which is 
produced at the customs bank by melting and refining the Mexican, Span- 
ish and other foreign dollars received in payment of duties, commands a 
premium over the dollar currency ranging from 3 to 10 per cent, according 
to the supply and demand of the two commodities. By the Chinese this 
silver is called wan-yin (fine silver), but in foreign commerce it is known 
as sycee, which is the colloquial pronunciation of the Chinese words se-sze, 
meaning "fine silk," and implying accordingly that the silver is so pure that 
it might be drawn out to the finest silken thread wire. Sycee silver means, 
therefore, "purest silver." 

In exchange on London, at sight and four months' sight, Shanghai 
receives 3s. lod. for i tael ; Paris, sight and four months' sight, 4.90 francs 
for I tael ; Germany, four months' sight, 3.95 marks for i tael, and Bombay 
and Calcutta, demand, 315 rupees for 100 taels; and gives New York, four 
months' sight, 105 taels for $100; Hongkong, telegraphic transfers and three 
days' sight, 27 per cent discount, i. e., 73 taels for $100; Yokohama, tele- 
graphic transfers and thirty days' sight, 74 taels for $100. 

Gold bars are quoted in taels currency per 10 taels, Shanghai weight, q8 
touch fine (365.6 grams). Silver bars are quoted in taels currency per 100 
taels, Canton weight. 

Mexican and Carolus dollars are quoted in taels per $100. [The prefer- 
ence of the Chinese for the Carolus (Spanish) dollar procures for that coin 
generally a higher quotation than that for the Mexican dollar. The relation 
between these coins is as follows : Full weight Carolus dollar, 413.76 
grains troy; full weight Mexican dollar, 416-64 grains troy, which, at 6od. 
per ounce standard, makes the Mexican dollar equal 4s. 2.55d., and Carolus 
dollar equal 4s. 2.09d.]. 

At the ports of Hongkong, Canton, Foochow and Amoy accounts are 
kept in dollars and cents. 

At Hongkong, Canton, and Foochow chopped dollars, which are Mexi- 
can dollars chopped or stamped by the natives, are the circulating medium 
and in all payments it is the custom for them to be examined and weighed 
at the rate of 717 taels. Canton weight, per $1,000. At Foochow chopped 
dollars of the lowest description pass current, but at Hongkong and Canton 
only fairly good chopped dollars are taken at par. At Amoy accounts are 
kept in currency dollars weighed at 720 taels, Canton weight, per $1,000. 
Mexican dollars are also taken at Amoy by arrangement; not weighed, but 
counted. At these four ports clean or unchopped Mexican dollars usually 
command a small premium in the market and when sold at a premium are 
counted instead of weighed. 



334 



SMITH'S FINANCIAL DICTIONARY. 



The following are the approximate average weights of the various de- 
scriptions of dollars circulating at the Chinese ports : 

Grains troy. 

Japanese trade dollar 400 

Japanese yen or dollar 416 

Hongkong dollar 416 

Mexican dollar, about 416H 

Carolus or Spanish dollar, about 414 

The Mexican dollar is about 0.898 fine. New Mexican dollars weigh 
from 867 to 869 ounces troy per $1,000, according to where they have been 
minted, as some of the mints issue coins of fuller weight than others. The 
value in sterling of the above dollars depends upon the price of bar silver 
in London and has ranged in past years from 3s. 6d. to 4s. 6d. The Carolus 
dollar is about 0.894 fii^e. 

Sycee and bar silver are dealt in at these four ports at a variable pre- 
mium, the par being taken at 717 taels. Canton weight, equal to $1,000. 

COLOMBIA. 

The Republic of Colombia has nominally the single silver standard, 
but its currency consists almost exclusively of paper money, divisional 
silver coins and nickel coins. 

The weight, fineness, etc., of the coins of Colombia are as follows : 



GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


Double condor 

Condor 


Grains. 
32.2580 
16.1290 


i,000tlis 1 Grams. 
900 29.0322 

90o|tzl.c;t6t 


Grains. | Grains. 
497.81 78 1 448.0360 
248.9089 22/f.OT8o 


$19-2952 
9.6476 






1 ^ 




• 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared AJV'ith 
silver in 
United States 
s Iver dollar. 



Peso 

2 decimos. . 
Decimo . , . 
Half decimo 



Grams. 


l.OOOths 


Grams. 1 


25.0000 


900 


22.5000 


5.0000 


835 


4-1750 


2.5000 


835 


2.0875 


1.2500 


835 


1-0437 



Grains. 
385-8089 
77.1617 
38.5808 
19.2904 



Grains. 
347.2280 
64.4300 
32.2150 
16.1075 



$0.9352 

-1735 
.0867 

-0433 



See Korea. 



COREA. 



COSTA RICA. 



Costa Rica has the single gold standard and the monetary unit is the 
colon. Gold coins are full legal tender, silver coins to the amount of lO 
colons and copper coins to the amount of i colon. 

The weight, fineness, etc., of the coins of Costa Rica are as follows: 



SMITH'S FINANCIAL DICTIONARY. 



335 



GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



20 colons, 
10 colons. 
5 colons.. 
2 colons. . 



Grams. 
15.5600 
7.7800 
3.8900 
1.5560 



l,000ths 
900 
900 
900 
900 



Grains. \ Grains. 
14.0040 

7.0020 

3-5010 

1 .4004 



240.1274 

120.0637 

60.0318 

24.0127 



Grains. 

216.II47 

108.0573 

54.0286 

2I.61I4 



$9.3072 

4-6536 

2.3268 

.9307 



The value of the silver coins is as follows : 
50 centimes equal to one-half colon, or $0.23267627. 
25 centimes equal to one-fourth colon, or $0.11633813. 
10 centimes eaual to ene-tentn colon, or $0.04653525. 
5 centimes eaual to one-twentieth colon, or $0.02326762. 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Copper. 
I centime ..... 


Grains. 
2.5000 


75 per cent cop- 
per and 25 per 
cent nickel. 


Grains. 
34.7228 




$0.0046 





CUBA. 

The monetary system of Cuba is the same as that of Spain. Ac- 
counts are kept, however, in piasters of 8 reals of 10 cuartes each. The 
metallic circulation 4s composed chiefly of the geld coins mentioned below 
and of the piasters of Spain and its subdivisions ; of Mexican pesos and 
American dollars. 

The weight, fineness, etc., of the principal geld coins in circulation in 
Cuba are as follows : 

GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


Spanish quadruple 
(onza) 


Grams. 

27.0643 
8.3871 
8.0645 


l,000fchs 

875 
900 
900 


Grams. 

23.6812 

7.5483 
7.2580 


Grains. 

417.6659 
129.4327 
124.4543 


Grains. 

365.4576 
116.4894 
112.0089 


$15-7389 
5.0167 
4.8238 


Doubloon Isabella . . .. 
Alphense (25 pesetas) 







MINOR COINS 








D enomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 

10 centimes. . 
5 centimes . . . 
2 centimes . . . 
I centime. . . . 


Grams. 
10.0000 

5.0000 

2.0000 
1. 0000 


1 95 per cent cep- 
i per, 4 per cent 
\ tin, and i per 
J cent zinc. 


Grains. 

r 154.3235 

j 77-'^^i7 

30.8647 
I 15-4323 


1 To the 

1 amount of 

['5 pesetas. 

J 


[$0.0192 
.0096 
.0038 
.0019 



336 



SMITH'S FINANCIAL DICTIONARY. 



DENMARK. 
For general information as to the money of Denmark see Scandi- 
navian Union, The. 

The weight, fineness, etc., of the coins of Denmark are as follows : 

GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



20 crowns 
10 crowns 
5 cfowns. 



Grams. 


l.OOOths 


Gra77is. 


8.9606 


900 


8.0645 


4.4803 


900 


4.0322 


2.2415 


900 


2..Q>\6\ 



Grains. 

138.2831 

69.1415 

34.5707 



Grains. 

124.4548 

62.2274 

3I.II37 



$5-3598 
2.6799 
1.3389 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 

silver in 
United States 
silver dollar. 



2 crowns 
I crown . 
50 ore. . . 
40 ore. . 
25 ore. . . 
10 ore. . . 



1 Grams. 


l,000ths 


Grams. 


15.0000 


800 


12.0000 


7.5000 


800 


6.0000 


5.0000 


600 


3.0000 


4.0000 


600 


2.4000 


2.4200 


600 


1.4520 


1.4500 


400 


.5800 



Grains. 

231.4853 

115.7426 

77.1617 

61.7294 

22.3769 



Graiyis. 
185.1882 
92.5941 
46.2970 
37.0376 
22.4077 

8.9507 



$0.4988 
.2494 
.1247 
.0997 
■0603 
.02^1 







MINOR COINS 








Denoraination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 

5 ore 

2 ore 


Grams. 
8.0000 
4.0000 
2.0000 


1 95 per cent cop- 
l per, 4 per cent 

tin, and i per 

cent zinc. 


Grains. 

r 123.4588 

J 61.7294 

30.8647 


^ To the 

amount of 
J I crown. 


r $0.0133 

J .00 c-? 


I ore 


[ .0026 



ECUADOR. 

Ecuador has the single silver standard and the monetary unit is tlje 
Sucre or peso. 

The weight, fineness, etc., of the coins of Ecuador are as follows : 

GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


1 Grains. \ l,000ths 

ID sucres | 8.1360I 900 


Grams. 
7.3224I 


Grains. \ Grains. \ 
I25.5576I1I3.OOI8I $4.8665 



SILVER. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained. 


Value com- 
pared with 
silver in 
United States 
silver dollar. 


Sucre 


Grams. 
25.0000 
5.0000 
2.5000 
1.2500 


l.OOOths 1 
900 
900 
900 
900 


Grains. 
22.5000 
4.5000 
2.2500 
1.1250 


Grains. 
385.8089 
77.1617 
38.5808 
19.2904 


Grains. 
347.2280 

69.44 =;6 
34.7228 
17.3614 


$0.9352 
.1870 

.0935 
.0467 


Peseta, or 20 cents. . . . 

Real, or 10 cents 

Medio-real, or 5 cents. 



i 



SMITH'S FINANCIAL DICTIONARY. 



327 



EGYPT. 
Egypt has the single gold standard. Silver is legal tender to the 
amount of 200 piasters, or about $10, in any one payment. Nickel and 
bronze coins are legal tender to the amount of 10 piasters, or about 50 
cents. Payments in Egypt are generally made in foreign gold pieces, offi- 
cially rated by the government as follows : 

Piasters. 

Pound sterling 97-50 

Turkish pound ! 87.75 

Old Russian imperial 7945 

20-franc piece -. 77-15 

Austrian sequin 45-92 

The rates given the sequin and the imperial are nominal as these pieces 
do not circulate. The German gold coins are not rated, but are valued as 
follows : Twenty-mark pieces, 95.5 piasters ; lo-mark pieces, 47-75 piasters. 
Silver coins, such as the Maria Theresa thaler, 5-franc piece, etc., are no 
longer received in the public treasuries, which accept no coins but English 
sovereigns, 20-franc pieces and Turkish pounds. 

The weight, fineness, etc., of the coins of Egypt are as follows : 

GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure, 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


1 Grains. 

Egyptian pound 8.5000 

50 piasters 4.2500 


IjOOOths 1 Grains. Grains. \ Grains. \ 

875 7-4375131-1750114-78811 $4-9430 
875 3-7187 65-5875 57-3890! 2.4715 



SILVER. 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 



Value com- 
pared with 

silver in 
United States 
silver dollar. 



20 piasters. 
10 piasters, 
5 piasters. , 
2 piasters. . 
Piaster ... 



Grams. 


l,000ths 


Grains. 


Grains. 


Grains. 


28.0000 


8337^ 


23-3333 


432.1059 


360.0883 


14.0000 


833* 


11.6666 


216.0529 


180.0441 


7.0000 


8337^ 


5-8333 


108.0264 


90.0220 


2.8000 


833:^ 


2-3333 


43.2105 


36.0088 


1.4000 


833i 


1. 1666 


21.6052 


18.0044 



$0.9699 

.4849 

.2424 
.0969 

.0488 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


'Weight. 


Legal tender. 1 


Value. 


Nickel. 


Grains. 




Grains. 






5 ochr-el- 










' 


guerche . . . 


4.0000 


75 per cent cop- 
- per and 25 per 
cent nickel. 


[ 61.7294 




r $0.0247 


2 ochr-el- 




1 
] 30-8647 






guerche . . . 


2.0000 




.0098 


I ochr-el- 




1 






guerche . . . 


1-7500 


J 


[ 27.0066 


To the 
amount ofi 


.0049 


Bronze. 








10 piasters. 


_. 


Yi ochr-el- 




f 95 per cent cop- 


1 






guerche , . . 


3-3333 


1 per, 4 per cent 


; 51-4406 




■ .0024 


^ ochr-el- 




1 tin, and i per 








guerche . . . 


2.0000 


i cent zinc. 


J 30.8647 




1 .0012 



338 



SMITH'S FINANCIAL DICTIONARY. 



FINLAND. 
Finland has the single gold standard, with the markkaa (equal to the 
franc) as the monetary unit. 

The weight, fineness, etc., of the coins of Finland are as follows : 

GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


Grains. 

20 markkaa 6.4520 

10 markkaa 3.2260 


l.OOOtlis 
900 
900 


Grams. 
5.8068 
2.9034 


Grains. 

99-5695 

49-7847 


Grains. 

89.6126 

44-8063 


$3-8592 
1.9296 


SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 

con- 
tained. 



Value com- 
pared with 

silver in 
United States 
silver dollar. 



2 markkaa 
I markkaa 
50 penni. . , 
25 penni . . 



Grams. 
10.3650 
5.1825 
2.5490 
1-2745 



l,000ths I Grains. \ Grains. \ Grains. 



868 
868 
750 
750 



8.9968 
4.4984 
1-9117 
0.9558 



159=9562 
79-9781 
39-3370 
19.6685 



138.8421 
69.4210 
29.5028 
14-75141' 



$0.3739 
.1869 
.0794 

.0397 







MINOR COINS 








Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze . 

10 penni 

5 penni 

I penni 


Grains. 
12.7968 

6.3984 
1.2796 




Grains. 

197.4847 
98-7423 
19.7484 


To the 
\ amount of 
[i markkaa. 


$0.0192 

- .0096 

.0019 









The. 



FRANCE. 

For general information as to the money of France see Latin Union, 

The weight, fineness, etc., of the coins of France are as follows : 

GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



TOO francs. 
50 francs. . 
20 francs . . 
10 francs. . 
5 francs. . 



Grams. 
32.2580 
16.1290 
6.4516 
3.2258 
1. 6129 



l,000ths 
900 
900 
900 
900 
900 



Grams. 
29.0322 
I4.5161 
5.8064 
2.9032 
1-4516 



Grains. 
497.8178 
248.9089 

99-5635 
49.7817 
24.8908 



Grains. \ 

448.0360 1 

224.O180I 

89.6072 1 

44-80361 

22.40 1 8| 



$19.2952 

9.6476 

3.8590 

1.9295 

.9647 



SILVER. 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 

NVgt. 


Weight. 


Pure 
.silver 

con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



5 francs. . . . 
2 francs. . . . 
I franc . . . . 
50 centimes. 
20 centimes. 



I Grams. | l,000ths j Grams. I Grains. \ Grains. 



25.00001 
1 0.0000 1 

5.0000 
2.50001 

1. 0000 1 



900I22.5000I383.8089 

835I 8.3500I 154.3235 
83^1 4.17501 77-1617 

835 1 2.0875 1 38.5808 



347.2280 

128.8601 

64.4300 

32.2150 



835 1 0.8350I 15-4323! I2.8860I 



$0.9352 
•3470 

.1735 
.0867 

.0347 



SMITH'S FINANCIAL DICTIONARY. 



339 



MINOR COINS. 


Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 

10 centimes. .. 

5 centimes 

2 centimes. . . . 
I centime 


Grams. 
10.0000 

5.0000 

2.0000 
1. 0000 


95 per cent cop- 
per, 4 per cent 
tin, and i per 
cent zinc. 


Graitts. 
(-154.3235 

77-1617 
1 30.8647 
I 15-4323 


To t he 
1 amount of 
[5 francs. 

J 


-$0.0192 
.0096 
.0038 
.0019 






GERMANY 









The standard of the German Empire is gold monometallic and the 
monetary unit is the mark of 100 pfennigs. Silver is legal tender to the 
amount of 20 marks. All silver coins are exchangeable for gold at the public 
treasuries. 

The weight, fineness, etc., of the coins of Germany are as follows : 







GOLD. 








Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


Double crown (20 
marks) 


Grams. 

7.9649 
3-9824! 


l,000tlis 

900 
900 


Grams. 

7.1684 
3-5842 


Grains. 

122.9177 
61.4588 


Grains. \ 

110.6260 $4.7642 
55-3130 2,3821 


Crown (10 marks) .... 


SILVER. 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



5 marks .... 

2 marks .... 

Mark ...... 

50 pfennigs . 
Thaler 



1 Grams. 


l.OOOths 


Grams. 


Grains. 


Graifts. 


27.7777 


900 


25.0000 


428.6765 


385-8089 


II. nil 


900 


10.0000 


171.4706 


154-3235 


5-5555 


900 


5.0000 


85-7353 


77.1617 


2.7777 


900 


2.5000 


42.8676 


38.5808 


18.5185 


900 


16.6666 


285.7840 


257.2056 



$1.0392 
.4156 
.2078 
.1039 
.6928 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 


Grains. 




Grain s^. 






10 pfennigs. . 


4.0000 


] 75 per cent cop- 


\ 61,7294 


1 


["$0.0238 


5 pfennigs . . . 


2.5000 


r per and 25 per 
cent nickel. 


\ 38.5808 




.0119 








' 




Bronze. 








To the 
f amount of 


\ 


2 pfennigs . . . 


3-3333 


'95 per cent cop- 
per, 4 ner cent 


] 51.4406 


I mark. 


.0047 


I pfennig. . . . 


2.0000 


30.8647 


1 


.0023 






tin, and i per 












[ cent zinc. 






^ 



340 



SMITH'S FINANCIAL DICTIONARY. 



GREAT BRITAIN (AND COLONIES). 

The single gold standard was definitely adopted in England by the 
act of Parliament passed June 22, 1816. The sovereign or pound ster- 
ling is the monetary unit. The legal gold coins of Great Britain are 
the sovereign, half-sovereign, 2-sovereign and s-sovereign pieces. The 
gold coins in circulation consist of sovereigns and half-sovereigns. The 
silver coins are the crown, double florin (no longer issued), half-crown, 
florin, shilling, 6 pence and 3 pence pieces. The silver coins of Great 
Britain are a legal tender for 40s., or £2 — equal to $9.73.2 in United 
States money. The present legal ratio between gold and silver in the coin- 
age of Great Britain is as i to 14.28781. 

Individuals have the right to deposit gold at the royal mint for coinage 
and receive in return therefor £3 17s. 10 i-2d. per ounce of standard gold 
(916 2-3 in English standard) under the law, but as a matter of fact since 
1844 the Bank of England has been the only depositor of gold at the royal 
mint. The charter of the bank makes it obligatory upon the bank to receive 
all gold brought to it by the public and to pay for it immediately at the rate 
of £13 17s. gd. per ounce, standard. The difference of i i-2d. compensates the 
bank for the loss of interest between the date of the deposit of the gold at 
the mint and the date it receives the same back in the form of coin. 

The English colonies of Malta, Gibraltar, the Cape of Good Hope, 
Natal, the Australian colonies and New Zealand have the same monetary 
system as in England. In Canada, however, the gold dollar of the United 
States is the monetary unit and the pound sterling or sovereign is a legal 
tender at the rate of $4.86.6. In the settlements of the Straits of Malacca and 
Hongkong the single silver standard prevails, the British dollar (coined in 
pursuance of the British dollar order, 1895), the Hongkong and the Mexi- 
can dollar being legal tender for the payment of all sums in these colonies. 

The weight, fineness, etc., of the coins of Great Britain are as follows : 

GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



5 pounds 

2 pounds 

Sovereign .... 
Half sovereign 



Grams. 

39.9402 

15.9761 

7.9880 

3.9940 



l.OOOths I Grams. \ Grams. I Grams. 



916II36.6119 
916II 14.6447 
916II 7-3223 
916II 3.661 1 



616.3723 

246.5489 

123.2744 

61.6372 



565.0079 

226.0031 

1 13.0015 

56.5007 



$24.3328 
97331 
4.8665 
2.4332 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 

silver in 
United States 
silver dollar. 



Crown .... 
Half crown 

Florin 

Shilling . . , 
Sixpence . . 
Fourpence 
Threepence 
Twopence . 
Penny .... 



Grains. 


l.OOOths 


Grains. 


Grains. \ 


Graifis. 


28.2759 


925 


26.1552 


436.3637 


403-6364 


14-1379 


925 


13.0776 


218.1818 


201.8182 


II.3IO3 


925 


10.4620 


I74-.S455 


161.4545 


5-6551 


925 


5-2310 


87.2727 


80.7272 


2.8275 


925 


2.6155 


436363 


40.3636 


1.8850 


925 


1.8850 


29.0909 


26.9090 


I4137 


925 


1.3077 


. 21.8181 


20.1818 


.9425 


925 


.8718 


14-5454 


13-4545 


.4712 


925 


•A359 


7.2727 


6.7272 



$1.0872 
-5436 
.4348 
-2174 
.1087 
.0724 
-0543 

.0362 
.0181 



SMITH'S FINANCIAL DICTIONARY. 



341 







MINOR COINS 








Denomination. 


.Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 

I penny 

Halfpenny . . . 
Farthing .... 


Grams. 
9.4498 
5-6699 
2.8349 


1 95 per cent cop- 
1 per, 4 per cent 
tin, and i per 
J cent zinc. 


Grains. 

(■145-8333 
\ 87.5000 

I 43-7500 


ITo the 
•-amount of 
J I shilling. 


r $0.0202 
J .0101 

j .0050 



The. 



GREECE. 

For general information as to the money of Greece see Latin Union, 

The weight, fineness, etc., of the coins of Greece are as follows : 

GOLD. 



Denomination. 

1 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


100 drachmas 


Grains. 
32.2580 
16.1290 
6.4516 
3-2258 
I.6129 


l.OOOths 
900 
900 
900 
900 
900 


Grams. 

29.0322 

I4.5161 

5.8064 

2.9032 

L45i'6 


Grains. 
497.8178 
248.9089 
99-5635 
49.7817 
24.8908 


Grains. 
448.0360 
224.0180 
89.6072 
44.8036 
22.4018 


$19.29 '^2 


50 drachmas 


9.6476 


20 drachmas 

10 drachmas 


3-8590 
1.929s 

.9647 


5 drachmas 



SILVER. 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



5 drachmas 
2 drachmas 
I drachma, 
50 lepta. . . 
20 lepta. . . 



Grams. 


l,000tlis 


Grams. \ 


Grains. \ 


Grains. \ 


25.0000 


900 


32.5000 


385-8089 


347.2280 


10.0000 


835 


8.3500 


154-3235 


128.8601 


5.0000 


835 


4-1750 


77.1617 


64 4300 


2.5000 


835 


2.0875 


38.5808 


32.2150 


1. 0000 


835 


0.8350 


15-4323 


12.8860 



$0.9352 
•3470 
.1735 
.0867 
•0347 







MINOR COINS 








Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 

20 lepta 

10 lepta 

5 lepta 

Bronze. 

2 lepta 

I lepton 


Grams. 
4.0000 
3.0000 
2.0000 

2.0000 
1. 0000 


1 75 per cent cop- 
r per and 25 per 
J cent nickel. 

1-95 per cent cop- 
per, 4 per cent 

I tin, and i per 
cent zinc. 


Grains 
f 61.7294 
\ 46.2970 
I 30.8647 

f 30.86^7 
1 15-4323 


To the 
amount of 
5 francs. 


$0.0385 
.0192 
.0096 

i 

.0038 

.00 1 g 

1 



342 



SMITH'S FINANCIAL DICTIONARY. 



GUATEMALA. 
Accounts in Guatemala are kept in the silver peso or piaster. 
The weight, fineness, etc., of the coins in use in Guatemala are as fol- 



lows 



GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



Onza or doubloon 

Half onza 

20 pesos 

10 pesos 

5 pesos 

2 pesos 

I peso 



Grams. 

27.0643 

13-5321 

32.2580 

16.1290 

8.0645 

3.2258 

I.6129I 



l,000ths 
875 
875 
900 
900 
900 
900 
900 



Grains. \ 

23.6812 

11.8406 

29.0322 

I4.5161 

7.2580 

2.9032 

1.4516 



Grains. 
417.6659 
208.8329 
497.8169 
248.9084 
124.4542 
49.7816 
24.8908 



Grains. \ 
365.4576 
182.7288 
448.0352 
224.0176 
112.0088 

44.8035 
22.4017 



$15-7389 

7.8694 

19.2952- 

9.6476 

4.8238 

1.9295 
.9647 



SILVER. 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Grains. 


l,000ths 


Grams. 


25.0000 


900 


22.5000 


12.5000 


900 


11.2500 


6.2500 


900 


5.6250 


2.5000 


835 


2.0875 


1.2500 


835 


1.0437 


1. 6129 


900 


I.4516 



Weight. 



Pure 
silver 

con- 
tained. 



Value com- 
pared with 

silver in 
United States 
silver dollar. 



Peso 

Half peso. . . 
Quarter peso 

Dime 

Half dime . . 
I peso 



Grains. 
385.8089 
192.9044 
96.4522 
38.5808 
19.2904 
24.8908 



Grains. 

347.2280 

173.6140 

86.8070 

32.2150 

16.1075 
22.4017 



$0.9352 
.4676 
•2338 
.0867 
•0433 
-9647 







MINOR COINS. 








Denomination. 


. Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Copper. 
I centimo 


Grams. 
2.50000 


75 per cent cop- 
per and 25 per 
cent nickel. 


Grains. 
34-7228 




$0.0100 





HAITI. 

The money of account in Haiti is the gourde of 100 cents. The 
actual currency is irredeemable paper. The metallic gourdes have disap- 
peared entirely from circulation, being hoarded. Only the divisional coins 
are found in circulation, but these frequently command a premium of from 
I to 2 per cent. Many United States gold pieces are used, owing to the fact 
that export duties have to be paid in gold. 

The weight, fineness, etc., of the coins of Haiti are as follows : 

GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



10 gourdes 
5 gourdes. 
2 gourdes. 
Gourde . . 



Grams. \ l,000ths 

1 6. 1 290 1 900 

8.0645 j 900 
3.2258I 900 
I.6129I 900 



Grams. 
14.5161 
7.2580 
2.9032 
I.4516 



Grains. 

248.9084 

124.4542 

49.7816 

24.8908 



Grains. 

224.0176 

112.0088 

44.8035 

22.4017 



$9.6476 
4.8238 

1.9295 
.9647 



SMITH'S FINANCIAL DICTIONARY. 



343 



SILVER. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained. 


Value com- 
pared with 

silver in 
United States 
silver dollar. 


1 Grams. 

Gourde I25.0000 

Half gourde 1 12.5000 

Fifth gourde | 5.0000 

Tenth gourde. | 2.5000 


l,000ths 
900 
835 
835 
835 


Grams. \ Graitts. 

22.5000 1 385. 8089 

10.4375 1 192.9044 

4.I750I 77.1617 

2.0875 1 38.5808 


Graijis. 

347.2280 

161.0752 

64.4300 

32.2150 


$0.9352 
4338 
•1735 
.0867 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 

2 centimes .... 
I centime 


Grams. 

10.0000 

5.0000 


["95 per cent cop- 
per, 4 per cent 
1 pewter, and i 
[ per cent zinc. 


Grains. 

1 154-3235 
■j. 77.T617 

j 


iTo the 
'amount of 
■ 2 gourdes. 

J 


f $0.01 92 

f .0096 

I 



See Netherlands, The. 



HOLLAND. 



HONDURAS. 



Accounts in Honduras are kept in the silver peso or piaster. 

The weight, fineness, etc., of the coins in use in Honduras are as fol- 



lows 



GOLD. 



Denomination . 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



Onza or doubloon 

Half onza 

20 pesos 

10 pesos 

5 pesos 

2 pesos 

I peso 



Grains. 

27.0643 

13-5321 

32.2580 

16.1290 

8.0645 

3.2258 

I.6129 



l.OOOtks Grams. 



875 
875 
900 
900 
900 
900 
900 



23.6812 
11.8406 
29.0322 
I4.5161 

'7.2c;8o 
2.9032 
1.4516 



Graifis. 
417.6659 
208.8329 
497.8169 
248.9084 
124.4542 
49.7816 
24.8908 



Graijis. \ 
365.4576 
182.7288 
448.0352 
224.0176 
112.0088 

44-8035 
22.4017 



$15-7389 

7.8694 

19-2952 

9.6476 

4.8238 

1.9295 
.9647 



SILVER. 



D enomination. 



Weight 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 

con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



Peso 

Half peso. . . 
Quarter peso 

Dime ... 

Half dime. . . 



Grams. 
25.0000 
12.5000 
6.2500 
2.5000 
1.2500 



l.OOOths 1 Grams. 
900 1 22.5000 
900I 1 1.2500 
900 j 5.6250 
835 1 2.0875 
835 1 1-0437 



I Graifts. 

385.8089 

192.9044 

96.4522 

38.5808 

19.2904 



I Grai-ns. 

347.2280 

173.6140 

86.8070 

32.2150 

16.1075 



$0.9352 
.4676 
.2338 
.0867 
-0433 



344 



SMITH'S FINANCIAL DICTIONARY. 







MINOR COINS 








Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


I centimo 


Grams. 
2.5000 


75 per cent cop- 
per and 25 per 
cent nickel. 


Grahis. 
347228 




$0.0100 



HUNGARY. 

See Austria-Hungary. 

INDIA (BRITISH). 

The monetary standard is gold and the unit is the sovereign. The 
government undertakes to receive from the public gold in exchange for 
rupees and rupees in exchange for gold at the rate of 15 rupees to the 
sovereign. Rupees and half rupees remain full legal tender in payment 
or on account, side by side with the sovereign, at the rate of 15 rupees 
to the sovereign. The coinage of the gold mohur gradually declined with the 
importation of gold bars bearing recognized marks and for many years the 
few mohurs which have been coined have been struck as specimens. In the 
future these coins will not enter into circulation or be a part of the Indian 
monetary system. 

The weight, fineness, etc., of the coins of British India are as follows : 

GOLD. 



Denomination. 


Weight. 


, Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


Sovereign 


Grams. 
7.9880 
3.9940 


l,000tlis 1 Grams. \ Grains. 


Grains. 

II3.OOI5 

56.5007 


$4.8665 


Half sovereign 


9 1 6.1 


3.661 1 


61.6372 


2.4332 



SILVER. 



Denomination. 



Rupee 

Half rupee... 
Quarter rupee 
Eighth rupee. 



Weight. 



Granu. 

11.6640 
5.8320 
2.9160 
1.4580 



Fine- 
ness. 



l,000ths 
916I 

9i6§ 
9i6t 
916I 



Fine 
wgt. 



Grams. 

10.6920 
5-3460 
2.6730 

1-3365 



Weight. 



Pure 

silver 
con- 
tained. 



Grai^is. 
180.0030 
90.0015 
45.0007 
22.5003 



Grains. 
165.0027 
82.5013 
41.2506 
20.6253 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



$0.4444 
.2222 
.1111 

•0555 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Copper. 
2 pice or Yi 


Grams. 

12.9598 

6.4799 

32399 

2.1599 




Graifts. 
200.0000 

100.0000 
50.0000 
33.333- 


1 

To the 
-amount of 
I rupee. 

J 


$0.0101 

.0050 
.0025 
.0016 


I pice or J4 




anna 

>4 pice or y% 




anna 

I pie or 1-12 









SMITH'S FINANCIAL DICTIONARY. 



245 



ITALY. 

For general information as to the money of Italy see Latin Union, The. 
The weight, fineness, etc., of the coins of Italy are as follows : 

GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



100 lire. 
50 lire. 
j20 lire. 
10 lire. 
5 lire. 



Grj-Jiis. I 

32.2580 

16.1290 

6.4516 

3.2258 

I.6129 



l,OO0ths 
900 
900 
900 
900 
900 



Grains. \ Grains. 
29.0322 
14-5161 

5.8064 

2.9032 

I.4516 



497-8178 

248.9089 

99.5635 

49.7817 

24.8908 



Grains. 
448.0360 
224.0180 
89.6072 
44-8036 
22.4018 



$19.2952 
9.6476 
3.8590 
1.9295 

.9647 



SILVER. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained. 


Value com- 
pared with 
silver in 
United States 
silver dollar. 


c; lire 


Grams. 

25.0000 

10.0000 

5.0000 

2.5000 

1. 0000 


l,000ths 
900 

835 
835 
835 


Grains. \ 

22.5000 

8.3500 

4-1750 
^.087:; 


Grains. 
385-8089 
154-3235 

77-1617 

?8.58o8 
15-4323 


Grains. 

3zi 7.2280 

128.8601 
64.4300 
32.2150 
12.8860 


$0.9352 

.3470 

.1735 
.0867 

.0347 


2 lire 


I lira 


50 centesimi 


20 centesimi 


835 O.R-XKO 













MINOR COINS 








Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 
20 centesimi. . 

Bronze. 

10 centesimi.. 

5 centesimi. . . 
2 centesimi. . . 
I centesimo. . 


Grams. 
4.0000 

10.0000 
5.0000 
2.0000 
1. 0000 


75 per cent cop- 
per and 2c; per 
cent nickel. 

1 96 per cent cop- 
1 per and 4 per 
I cent tin. 
J 


Grams. 
61.7294 

n 54.323^ 
] 77.1617 

! 30.8647 
I 15.4323 


To the 
amount of 
5 francs. 

1 To the 
i amount of 
feach Diece. 
J 


$0.0385 

r .0192 
J .0096 
1 .0038 
I .0019 



JAPAN. 

Japan has the single gold standard and the unit is the yen. The 
unit is not coined. The hundredth part of a yen is a sen and the tenth 
part of a sen a rin. The gold coins are full legal tender; silver coins are 
legal tender to the amount of 10 yen, and nickel and copper coins to the 
amount of i yen. 

In September, 1879, the Japanese silver yen of 416 grains, .900 fine, 
was declared by the government to be a legal tender, to be received and paid 
on a par with the Mexican dollar and to be accepted at the government 
offices in payment of customs dues, land rents, etc. The foreign banks and 
7the mercantile community have recognized this action on the part of the 



346 



SMITH'S FINANCIAL DICTIONARY. 



government and this silver yen of 416 grains is, in fact, the present mone- 
tary unit and it has virtually supplanted the Mexican dollar. 

Trade among the Japanese is carried on to a large extent in a govern- 
ment paper money which is inconvertible but stands at par. This paper 
is styled kinsatsu. 

The weight, fineness, etc., of the coins of Japan are as follows : 



GOLD, 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



20 yen 

10 yen 

5 yen 

Yen (not coined) 



Grains. \ l,000ths i Grains. 
16.66651 900 1 14.9998 

8.33331 900I 74999 

4.1666I 900I 37499 

•8333 1 900 1 .7499 



Gratfis. 

257-2033 

128.6024 

64.3004 

12.8602 



Grains. 

231.4830 

115.7422 

57.8704 

11.5742 



$9.9691 

4.9845 

2.4922 

.4984 



SILVER, 



Denomination. 



Weight. 



Fine- 
ness, 



Fine 
wgt. 



Weight. 



Pure 

siK'er 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



50 sen 
20 sen 
10 sen 



Grams. \ l.OOOths 
800 
800 
800 



134783 
5-3914 
2.6955 



Grams. 
10.7826 

^1-3131 
2.1564 



Grains. 

208.0019 

83.2020 

41-5979 



G7 



166.4015 
66.5616 
33-2783 



$0.4482 
.1792 
.0896 



MINOR COINS. 



Denomination. 



Nickel. 
5 sen... 



Bronze. 



I sen, 
5 rin. 



Weight. 



Grams. 
4,6654 



7.1280 
3.5640 



Composition. 



75 per cent cop- 
per and 25 per 
cent nickel. 



[95 per cent cop- 
J per, 4 per cent 
1 tin, and i per 
[ cent zinc. 



Weight. 



Grains. 
71,9981 



1 

! IIO.OO18 

[ 55.0009 



Legal Tender. 



To the 
\ amount of 
' I yen. 



Value. 



r $0,0245 



.0049 
.0024 



KOREA. 

The unit of value in Korea is the silver Hang, equal to 20 Japanese 
sen and equal to 9.96 United States cents. There is a 5-liang piece, or dollar, 
so-called, equal to the Japanese yen, which is equal to 49.84 United States 
cents, 

LATIN UNION, THE (BELGIUM, FRANCE, GREECE, ITALY, 

SWITZERLAND). 

The Latin Union has the double standard and the ratio of gold to silver 
of I to 15 1-2, The coinage of gold is unlimited and the coinage of silver 



SMITH'S FINANCIAL DICTIONARY. 



347 



suspended. Gold coins and the 5-franc silver piece are unlimited legal 
tender. 

The franc is known as the lira in Italy and as the drachma in Greece. 
The centime is called the centesimo (plural centesimi) in Italy and the 
lepton (plural lepta) in Greece. The silver coins of less than five francs 
are legal tender between individuals to the amount of 50 francs and are re- 
ceivable by the' state to the amount of 100 francs in single payments. 

The convention now in force is dated November 6, 1885. By its terms 
the suspension of the coinage of the 5-franc silver piece is maintained in the 
countries of the union, but any of the contracting states may resume the 
free coinage of silver on condition of exchanging, during the entire duration 
of the convention, the 5-franc silver pieces bearing its stamp and circulating 
in the other states of the union for gold on demand. The latter, however, 
would then be at liberty not to receive the 5-franc silver pieces of the state 
that resumed the free coinage of the white metal. It was likewise stipu- 
lated in the convention of 1885 that the coins of each of the signatory 
powers should be received by the treasuries of the others as well as by the 
banks of France and Belgium and that the union might be terminated any 
time after January i, 1891, by giving one year's notice. 

The weight, fineness, etc., of the coins of the Latin Union are as fol- 
lows : 

GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wet. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



100 francs 
50 francs. 
20 francs. 
ID francs. 
5 francs. , 



Grams. | 
32.2580I 
16.1290 

6.45 i6l 
3-22581 
1.6129I 



i,000ths 
900 
900 
900 
900 
900 



Grams. 

29.0322 

I4.5161 

5.8064 

2.9032 

I. 45 16 



Grains. 
497.8178 
248.9089 
99-5635 
49-7817 
24.8908 



Grains. 

448.0360 

224.0180 

89.6072 

44-8036 

22.4018 



$19.2952 
9-6476 
3.8590 
1.9295 

.9647 



SILVER. 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained. 



Value com- 
pared with 

silver in 
United States 
silver dollar. 



5 francs . . . . 
2 francs . . . . 

I franc 

50 centimes 
20 centimes 



Grams. 


l.OOOths 


Grains. 


Grains. 


Grains. 


25.0000 


900 


22.5000 


385-8089 


347.2280 


10.0000 


835 


8.3500 


154-3235 


128.8601 


5.0000 


835 


4-1750 


77.1617 


64.4300 


2.5000 


83s 


2.0875 


38.5808 


32.2150 


1. 0000 


835 


0.8350 


15-4323 


12.8860 



$0.9352 
•3470 

.1735 
.0867 

•0347 



MEXICO. 



Mexico is a bimetallic country, but the legal standard is the silver dollar 
(peso). The Mexican silver dollar circulates not only in Mexico, but, 
under the name of piaster, is the current coin of several countries in 
America, Asia and Africa. 

The weight, fineness, etc., of the coins of Mexico are as follows : 



348 



SMITH'S FINANCIAL DICTIONARY. 



GOLD. 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



20 pesos 

10 pesos 

5 pesos , 

2^ pesos (no longer 

coined) 

Peso 



Grams. \ l,000ths | Grams. 



33.8410 

16.9200 

8.4600 

4.2300 
1.6920 



875 
875 

87=; 
87.S 



29.6108 

14.8050 

7.4025 

3.7012 
1.4805 



Grahts. 
522.2463 
261.II54 
130.5577 

65.2788 
26.III5 



Graifis. 

456.9655 
228.4760 
114.2380 

57.1190 
22.8476 



$19.6798 
9-8396 
4.9198 

2.4599 
•9839 



SILVER. 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 

silver 
con- 
tained. 



Value com- 
pared with 

silver in 
United States 
silver dollar. 



Peso 

50 centavos (no longer 

coined) 

20 centavos 

10 centavos 

5 centavo 



Grants. 
27.0730 

13-5360 
5.4146 
2.7073 
1-3536 



l.OOOths 
902.7 

902.7 
902.7 
902.7 
902.7 



Grams. 
24.4408 

12.2204 
4.8881 
2.4440 
1.2220 



Grains. 
417.8001 

208.9000 
83.5600 
41.7800 
20.8900 



Grains. 
377-1803 

188.5901 
75.4360 
37.7180 
18.8590 



$1.0159 

-5079 
.2031 
.1015 
•0507 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 
I centavo 


Grams. 
3.0000 


95 per cent cop- 
oer, 4 per cent 
tin, and i per 
cent zinc. 


Grains. 
46.2970 


To the 
amount of 
25 centa- 
vos. 


$0.0098 



NETHERLANDS, THE (HOLLAND). 
The Netherlands is classed as a double-standard country, but the 
country is on a gold basis. The foreign exchanges have adjusted them- 
selves as if the Netherlands possessed a gold standard. 

The monetary system of the Dutch colonies is the same as that of the 
Netherlands. 

The weight, fineness, etc., of the coins of the Netherlands are as follows : 

GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


10 florins 


Grams. \ l,000ths 

6 7200 1 <^(^(^ 


Grains. \ Grains. \ Grains. 

6 048o|Tn'j 'TOC/il m 1-2 /1 8 


$4.0195 















SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



Rixdaler (2^/2 florins) 

Florin 

Half florin 

Quarter florin 

Tenth florin 

Tv^rentieth florin 



Grains. 


l,000ths 


Grams. \ 


25.0000 


945 


23.6250 


10.0000 


945 


9.4500 


5.0000 


945 


4.7250 


3-5750 


640 


2.2880 


1 .4000 


640 


0.8960 


0.6850 


640 


0.4384 



Grains. 
385-8089 

154-3235 
77.1617 
55-1706 
21.6052 
IO.57II 



Grains. 
364.5894 

145-8357 

72.9178 

353092 

13-8273 

6.7655 



$0.9820 
.3928 
.1964 
.0951 
.0372 
.0182 



SMITH'S FINANCIAL DICTIONARY. 



349 







MINOR COINS. 








D enomination. 


Weig-ht. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 

2^ cents 

I cent 

y2 cent 


Grajns. 
4.0000 
2.5000 
1.2500 


1 95 per cent cop- 
per, 4 per cent 
tin, and i per 

J cent zinc. 


Grains. 
{ 61.7294 
, 38.5807 
1 19-2903 

I 


1T0 the 

1 amount of 
I I florin. 

J 


r $0.0100 
j .0040 

' .0020 



NEWFOUNDLAND. 

Newfoundland has a monetary system separate and independent 
from that of the Dominion of Canada. The standard is gold and the unit 
is the gold dollar, which is not coined, but which contains, theoretically^ 
25.682 grains or 1.664 grams of gold .916 2-3 fine. It is, therefore, 
worth $1.01.38 in United States coin. The actual gold coin is the $2 
piece which weighs double the unit. The dollar of the United States and 
the British sovereign are full legal tender at 98.5 cents and $4.80 respectively. 

Newfoundland has silver coins of 50, 20, 10 and 5 cents, all of which 
are .925 fine. The 50-cent piece or half-dollar weighs 181. 81 grains or 
11.782 grams- Thus, this colony has the coins of the United States in 
name, but of the British standard of fineness. Th^e minor coin is the cent, 
composed of 95 per cent copper, 4 per cent tin and i per cent zinc; it 
weighs 87 1-2 grains, whereas the cent of the United States weighs but 48 
grains. 

NICARAGUA. 

Accounts in Nicaragua are kept in the silver peso or piaster. 
The weight, fineness, etc., of the coins in use in Nicaragua are as fol- 
lows : 

GOLD. 



D enomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



Onza or doubloon 

Half onza 

20 pesos 

10 pesos 

5 pesos 

2 pesos 

I peso 



Grams. 

27.0643 

13-5321 

32.2580 

16.1290 

8.0645 

3.2258 

1. 6129 



l,000tlis 
87s 
875 
900 
900 
900 
900 
900 



Grams. 

23.6812 

11.8406 

29.0322 

I4.5161 

7.2580 

2.9032 

I.4516 



Grahis. 
417.6659 
208.8329 
497.8169 
248.9084 
124.4542 
49.7816 
24.8908 



Graifts. 
365-4576 
182.7288 
448.0352 
224.0176 
112.0088 
44-8035 
22.4017 



$15-7389 
7.8694 
19.2952 
9.6476 
4.8238 
1.9295 
.9647 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



Peso 

Half peso. . . 
Quarter peso 

Dime 

Half dime. . . 



Grams. 
25.0000 
12.5000 
6.2500 
2.5000 
1.2500 



l.OOOths 1 Grains. 
900122.5000 
900] 1 1.2500 
900 1 5.6250 
835 1 2.0875 
835 1 1.0437 



Grams. 
385.8089 
192.9044 
96.4522 
38.5808 
19.2904 



Grains. 

173.6140 
86.8070 

32.2150 

16.1075 



$0.9352 
.4676 
-2338 
.0867 
•0433 



350 



SMITH'S FINANCIAL DICTIONARY. 



MINOR COINS. 


Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


T cf'ntimo 


Grams. 
2.5000 


75 per cent cop- 
per and 25 per 
cent nickel. 


Grains. 
34.7228 




$0.0100 










NORWAY. 









For general information as to the money of Norway see Scandinavian 
Union, The. 

The weight, fineness, etc., of the coins of Norway are as follows : 



GOLD, 



Denomination. 


Weight. 


Fine, 
ness. 


Fine 
wgt. 


Weight. 


^^^f Value in 
?oi. United States 
tafned. ^^^^ ^^^^- 


20 crowns 


Grams. 
8.9606 
4-4803 
2.24.15 


l.OOOtlis 
900 
900 
900 


Grams. 
8.0645 
4.0322 
2.O161 


Grains. 

138.2831 

69.1415 

34.5707 


Grains. 

124.4548 

62.2274 

31.1137 


$5.3598 
2.6799 

1.3389 


10 crowns 


5 crowns 





SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



2 crowns 
I crown. 
50 ore. . . 
40 ore . . . 
25 ore. . . 
10 ore. . . 



Grams. 
15.0000 
7.5000 
5.0000 
4.0000 
2.4200 
1.4500 



l,000ths 
800 
800 
600 
600 
600 
400 



Grams. \ 
12.0000 
6.0000 
3.0000 
2.4000 
1.4520 
.5800 



Grains. 

231.4853 

115.7426 

77.1617 

61.7294 

22.3769 



Grains. 
185.1882 
92.5941 
46.2970 
37.0376 
22.4077 
8.9507 



$0.4988 
.2494 
.1247 
.0997 
.0603 
.0241 







MINOR COINS 








Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. - 
5 ore 


Grains. 

8.0000 
4.0000 
2.0000 


1 95 per cent cop- 
[ per, 4 per cent 
J tin, and i per 
' cent zinc. 


Grains. 
[123.4588 
- 61.7294 
t 30.8647 


ITo the 
amount of 
J I crown. 


f $0.0133 
\ .0053 
'1 .0026 


2 ore 


I ore 



PARAGUAY. 

The money of account of Paraguay is the peso, divided into 
8 reals ; it is also divided into 100 centavos. The country, however, has a 
depreciated paper currency. The gold onza is rated officially at 17 1-2 paper 
pesos. Five-franc pieces, venezolanos and other piasters of the same kind 
are in like manner reckoned as equivalent to i 1-4 paper pesos. 



I 



SMITH'S FINANCIAL DICTIONARY. 



351 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 


Grams. 




Grains. 






20 cents 


4.0000 


1 75 per cent cop- 


{ 61.7294 
\ 46.2970 


1 To the 


[$0.1929 
i .0964 


10 cents 


3.0000 


1- per and 25 per 


y amount of 
J 2 per cent 


5 cents 


2.0000 


j ' cent nickel. 


. 30.8647 


L .0482 










of the pay- 




' 








ment. 





PERSIA. 

In Persia ten shahis equal i penebat; 2 penebats equal i sahib- 
ghiran or kran ; 10 krans equal i toman, or 200 shahis equal i toman. The 
standard is silver. The principal coin is the kran, a silver piece of 71.065 
grains .900 fine. The krans which circulate vary, however, greatly, as the 
mints of the country are not reliable- The fineness of the coins oscillates 
between .760 and .900. In larger transactions the toman is taken as the 
unit, reckoned equal to 10 krans. There are some gold tomans and half- 
tomans in existence, but they are not the standard; they circulate only as 
commercial money and are taken by weight. 

The weight, fineness, etc., of the coins of Persia are as follows : 

GOLD. 



D enomination. 


Weight. 


Fine- 
ness. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


2 tomans 

Toman 


Grains. 
87.962 
43-981 


l,000ths 
900 
900 


Grains. 
79.166 
39-583 


$3,409 
1.704 





MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Copper. 

1 abassi (4 
chais) .... 

2 chais 


Gra77is. 

20.0000 

10.0000 

5.0000 

2.5000 




Grains. 

308.6471 

154-3235 

77.1617 

38.5808 




$0.0340 
.0170 
.0085 
.0042 






I chai 






Yi chai 







PERU. 

Peru has the double standard. The unit, the silver sol, is of the same 
weight and fineness as the French 5-franc piece. The new gold coin, 
called the libra peruana (Peruvian pound), is of the same weight and fine- 
ness as the pound sterling and both are now in circulation in Peru concur- 
rently with the silver sol at the legal par of equality, which is that of i to 31. 
This ratio values the sol at 24d. and the libra at 10 soles. Paper money dis- 
appeared from circulation in 1887 and its emission has since been prohibited. 

The weight, fineness, etc., of the coins of Peru are as follows : 



35^ 



SMITH'S FINANCIAL DICTIONARY. 



GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Libra .... 
Half libra. 



Gra7ns. | l,000ths 
7.9880 916I 

3.9940I 9i6| 



Fine 
wgt. 



Grams. 
7.3223 
3.661 1 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



Grams. 

123.2744 

61.6372 



Gravis. 

II3.OOI5 

.S6.5OO7 



$4.8665 
2.4332 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States- 
silver dollar. 



Sol 

Half sol 

Fifth sol 

Dinero (dime) 
Half dinero. . . 



Grams. 
25.0000 
12.5000 
5.0000 
2.5000 
1.2500 



l,000ths 
900 
900 
900 
900 
900 



Grams. Grains. 
22.5000 385.8089 
11.5000 192.9044 
4.5OO0I 77.1617 
2.2500I 38.5808 
I.I250I 19.2904 



Grams. 
347.2280 
173.6140 
69.4456 
34.7228 
17.3614 



$0.9352 
.4676 
.1870 

.0935 
.0467 



PORTUGAL. 

The standard of Portugal is gold monometallic, with the milrei of 
1,000 reis as the monetary unit. One thousand milreis or 1,000,000 reis 
is called a conto. Gold is coined in unlimited amounts on private ac- 
count at a mint charge of i milrei per kilogram. Silver, like copper, is 
coined only in divisional coins. Silver is legal tender only to the amount of 
5 milreis, but by Lisbon commercial usage one-third of all payments is 
accepted in that metal. 

The w^eight, fineness, etc., of the coins of Portugal are as follows : 



GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



Crown 

Half crown, 5 milreis. 
Fifth crown, 2 milreis. 
Tenth crown, i milrei. 



Grams. 

17-7350 

8.8675 

3-5470 
1-7735 



IjOOOths I Grams. \ Grahts. \ Graitis. 

250.8851 

125.4425 

50.1770 

25.0885 



916II16.2570I273.6928 

9i6f| 8.1285I136.8464 
9i6§| 3-2514 54-7385 
916II 1.6257I 57-3692 



$10.8046 
54023 
2.1609 
1 .0804 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 

con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



1,000 re IS 
500 reis. . 
200 reis. . 
100 reis. . 
50 reis. . 



I Grants. 

25.0000 

12.5000 

5.0000 

2.5000 

1.2500 



l,000tlis 
916I 

9i6§ 

gi6l 
91 6f 



Grams. 
22.9166 
11-4583 
45833 
2.2916 
1. 1458 



Grams. 
385-8089 
192.9044 
77.1617 
38.5808 
19.2904 



Grams. 
353-6581 
176.8290 
70.7316 
35-3658 
17.6829 



$0.9526 

•4763 
.1905 
.0952 
.0476 



SMITH'S FINANCIAL DICTIONARY. 



353 



MINOR COINS, 



Denomination. 



Nickel. 

100 reis. . 
50 reis . . . 

Bronze. 

20 reis . . . 
10 reis. . . 
5 reis 



Weight. 



Grams. 

4.0000 
2.5000 



12.0000 
6.0000 
3.0000 



Composition. 



1 75 per cent cop- 
j- per and 25 per 
J cent nickel. 



96 per cent cop- 
per, 2 per cent 
tin, and 2 per 
cent zinc. 



Weight. 



Grains. 

6l.72g4. 
38.5807 



185.1882 

92.5941 
46.2970 



Legal tender. 




ITo the 
j- amount of 
j 100 reis. 



Value. 



$0.1080 
.0540 

r .0216 
\ .0108 
I .0054 



The Portuguese possessions in Asia use a coinage of which the unit is 
the xerafin, equal to 1-2 rupee or 5 tangaS, each tanga being equal to 60 
Portuguese reis. 

ROUMANIA. 

The system of the Latin Union prevails in Roumania, the franc 
being called the lei and the centime the bani; but a measure passed 
by the Roumanian chamber in 1890 abrogated the double standard and sub- 
stituted for it the single gold standard, with a subsidiary silver coinage 
having a paying power to the amount of 50 leis or francs. 

The weight, fineness, etc., of the coins of Roumania are as follows : 

GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


20 leis 

10 leis 


Grams. 
6.4516 
3.2258 


l.OOOths 1 Grams. 
9001 5.8064 
900 2.9032 


Grains. 

99.5635 

49.7817 


Grains. 
89.6072 
44.8036 


$3.8590 
1.9295 



SILVER, 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 

con- 
tained. 


Value com- 
pared with 
silver in 
United States 
silver dollar 


5 leis 

2 leis 


Grams. 

25.0000 

10.0000 

5.0000 

2.5000 


l,000ths 
900 
835 
835 
835 


Grains. 
22.5000 
8.3500 
4-1750 
2.0875 


Grains. 
385.8089 

154.3235 
77.1617 
38.5808 


Grains. 

347.2280 

128.8601 

64.4300 

32.2150 


1 

$0.9352 
•3470 

•1735 
.0867 


Lei 


Half lei 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value, 


Bronze. 

10 bani 

5 bani 

2 bani 

I bani 


Grams. 
10.0000 

5.0000 

2.0000 
1. 0000 


1 95 per cent cop- 
'[ per, 4 per cent 
j tin, and i per 
J cent zinc. 


Grains. 
1 154.3235 
1 77-1617 
1 30.8647 
^ 15-4323 


ITo the 
\ amount of 
j 5 leis. 


r $0.0 1 92 
! .0096 
I .0038 
I .0019 



354 



SMITH'S FINANCIAL DICTIONARY. 



RUSSIA. 

The monetary system of Russia is based on gold; the unit is 
the ruble, divided into lOO copecks. Gold coin of full weight is legal tender 
for any amount. A tender of payment of money in silver coins of i ruble, 
50 copecks or 25 copecks is legal tender among private persons only to an 
amount not exceeding 25 rubles and in other silver coins, as well as in 
copper coins, to the amount of 3 rubles. Government treasuries receive the 
above-mentioned coins to any amount in all payments, with the exception of 
custom house duties, in which case the amount of silver and copper coin to 
be received as legal tender is fixed by the custom house regulations. 

1 he weight, fineness, etc., of the coins of Russia are as follows : 



GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


15 rubles (imperials) . 
10 rubles 


Grams. 

12.9039 

8.6026 

6.4519 
4-3063 


l.OOOths 
900 
900 

900 
900 


Grams. 

II.6135 

7.7423 

5.8067 
3.87II 


Grains. 
199.1376 
132.7584 

99.5688 
66.3792 1 


Grains. 

179.2239 
119.4826 

89.6119 
59.7413 


$7.7185 
5.1456 

3.8592 
2.5728 


7H rubles (half impe- 

reals 

5 rubles 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 

con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



I ruble . . . 
50 copecks 
25 cooecks 
20 copecks 
15 copecks 
10 copecks 
5 copecks. 



Grams. 


l,000ths 


19.9957 


900 


9.9978 


900 


4.9989 


900 


3.5992 


500 


2.6994 


500 


1.7996 


500 


.8998 


500 



Grams. 

17.9961 
8.9980 
4.4990 
1.7996 

1-3497 
.8998 
.4499 



Graijis. 
308.5811 
154.2905 
7*7.1452 
55.5446 
41.6584 
27.7723 
13.8861 



Grains. 

277.7230 

138.8615 

69.4307 

27.7723 

20.8292 

13.8861 

6.9430 



$0.7480 
•3740 
.1870 
.0748 
.0561 

.0374 
.0187 



MINOR COINS. 



Denomination. 



Copper. 

5 copecks. . 
3 copecks. . 
2 copecks . . 
I copeck... 
Yi copeck. . 
Ya, copeck. . 



Weight. 



Grams. 

16.3805 
9.8283 
6.5522 
3.2761 
1.6380 
.8190 



Composition. 



Weight. 



Grains. 
252.7895 
151.6737 
IOI.II58 

50.5579 
25.2789 
12.63941 i 



Legal tender. 



To the 

r amount of 

3 rubles. 



Value, 



r $0.0257 

I .0154 
I .0102 
.0051 
I .0025 
I .0012 



SALVADOR. 

Accounts in Salvador are kept in the silver peso or piaster. 

The weight, fineness, etc., of the coins in use in Salvador are as follows : 



SMITH'S FINANCIAL DICTIONARY. 



355 



GOLD, 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



Onza or doubloon 

Half onza 

20 pesos 

10 pesos 

5 pesos 

2 pesos. 

I peso 



Grajns. 

27.0643 

13-5321 

32.2580 

16.1290 

8.0645 

3-2258 

1. 6129 



l,000ths 
875 
875 
900 



Grams. 
23.6812 
11.8406 
29.0322 
900114.5161 
900 1 7.2580 
900 1 2.9032 



Grants. 
417.6659 
208.8329 
497.8169 
248.9084 
124.4542 

49.7816 



9O0I I.4516! 24.89081 



Grams. 
315-4576 
182.7288 
448.0352 
224.0176 
112.0088 

44-8035 
22.4017 



$15-7389 

. 7.8694 

19-2952 

9.6476 

4-8238 

1-9295 
.9647 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 

silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



Peso 

Half peso. . . 
Quarter peso. 

Dime 

Half dime. . . 



I Grams. | l,000ths Grains. \ Grauis. I Graijis. 
I25.OOOOJ 9OOJ22.5OOOl385.8089l347.2280 



12.5000 
6.2500 
2.5000 
I.25OOI 



900 
900 
83s 
835 



1 1. 2500 j 192.9044 
5. 6250 1 96.4522 
2.0875 i 38.5808 
1. 0437 1 19.2904 



173.6140 
86.8070 
32.2150 
16.1075 



$0.9352 
.4676 
•2338 
.0867 
•0433 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


T rentimo 


2.5000 


75 per cent cop- 
per and 25 per 
cent nickel. 


34.7228 




$0.0100 







SANTO DOMINGO. 

This country ostensibly has the gold standard, with the dollar of the 
United States as the unit, but the circulation consists principally of 
Mexican coins. 

SCANDINAVIAN UNION, THE (DENMARK, NORWAY, 

SWEDEN). 

The Scandinavian Monetary Union embraces Sweden, Norway and 
Denmark. These three kingdoms concluded in 1873 and 1875 a monetary 
convention based on the employment of the single gold standard and on a 
common system of coins and money of account. The krone or crown, 
divided into 100 ore, is the monetary unit. 

Silver coins are legal tender as follows : The 2-kronen and i-krone 
pieces to the amount of 20 kronen ; the 50, 40, 25 and lo-ore pieces to the 
amount of 5 kronen. All the coins above mentioned have legal currency in 
the three kingdoms- The monetary convention does not limit the coinage 
by the governments of the silver or bronze coins. In each of the three 



356 



SMITH'S FINANCIAL DICTIONARY. 



states are public treasuries, at which any sum of fractional coin divisible by 
10 kronen may be exchanged for gold. 

The weight, fineness, etc., of the coins of the Scandinavian Union are 
as follows: 

GOLD. 



D enomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



20 crowns 
10 crowns 
5 crowns. 



Grains. 
8.9606 
4.4803 
2.2415 



l,000ths 
900 
900 
900 



Grams. 
8.0645 
4.0322 
2.O161 



Grains. 

138.2831 

69.1415 

34-5707 



Grains. 

124.4548 

62.2274 

31-1137 



$5-3598 
2.6799 

1-3389 



SILVER. 



Denomination. 



Weight. 


Fine- 
ness. 


Grams. 


l,000ths 


15.0000 


800 


7.5000 


800 


5.0000 


600 


4.0000 


600 


2.4200 


600 


1.4500 


400 



Fine 
wgt. 



Weight. 



Pure 
silver 

con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



2 crowns 
1 crown. 
50 ore. . . 
40 ore. . . 
25 ore . . . 
10 ore. . . 



Grams, j 
12.0000 
6.0000 
3.0000 
2.4000 
1.4520 
.5800 



Grains. 

231-4853 

115.7426 

77.1617 

61.7294 

37-3463 
22.3769 



Grains. 
185.1882 

92,5941 
46.2970 

22.4077 
8.9507 



$0.4988 
.2494 
.1247 
.0997 
.0603 
.0241 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 
c ore 


Grams. 

8.0000 
4.0000 
2.0000 


1 95 per cent cop- 
r per, 4 per cent 
j tin, and i per 
cent zinc. 


Grains. 

: 123.4588 
-i 61.7294 
1 30.8647 


IT0 the 
1; amount of 
j' I crown. 


T $0.0133 
\ .005^ 


2 ore 


I ore 


[ .0026 



SERVIA. 

Servia has the same decimal system of coinage as the Latin 
Union. The unit is the dinar; the hundredth part of the dinar is the para. 
Five hundred dinars constitute the legal tender for 5-dinar pieces and 50 
dinars for the rest of the silver coinage. 

The Servian treasury receives foreign gold and silver money coined 
under the same system: as the Servian and admits it into circulation under a 
fixed tariff, provided reciprocal treatment is accorded to the Servian coinage 
in the foreign states to which such coinage belongs. The gold coinage of 
certain other countries not parties to the Latin Union is received into cir- 
culation under a special tariff in which the pound sterling is admitted at 25 
dinars. 

The weight, fineness, etc., of the coins of Servia are as follows : 



SMITH'S FINANCIAL DICTIONARY. 


357 


GOLD. 


Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


Grams. \ l,U00ths | Grains. 

20 dinars 6.4516 900I 5.8064 

10 dinars 3-2258 90o| 2.9032 


Grains. 

99-5635 

49.7817 


Grains. 

89.6071 

4^-8035 


1 

$3-8590 
1.9295 


SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 

con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



5 dinars . . . 
2 dinars. . . 
Dinar . . . . 
Half dinar 



Grams. 


l,000ths 


25.OOOOI 900 


10.0000 


835 


5.0000 


8?q 


2.5000 


835 



Grams. 
22.5000 
8.3500 
4.1750 
2.0875 



Grains. 
385-8089 

154-3235 
77.1617 
38.5808 



Grains. 

347.2280 

128.8601 

64.4300 

32.2150 



$0.9352 
•3470 

.1735 
.0867 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 

20 paras 

10 paras 

5 paras 

Bronze. 

10 paras 

5 paras 

I para 


Grains. 
6.0000 
4.0000 
3.0000 

10.0000 
5.0000 
1. 0000 


1 75 per cent cop- 
y per and 25 per 
J cent nickel. 

. 95 per cent cop- 
! per, 4 per cent 
j tin, and i per 
-' cent zinc. 


Grains. 

{ 92.5941 
\ 61.7294 
I 46.2970 

[154.3235 
-j 77.1617 
I 15-4323 


1 To the 
y amount of 
j 5 francs. 

1 T the 
j- amount of 
J I franc. 


( $0.0385 

< .0192 
' .0096 

t .0192 

< .0006 
' .0019 



SIAM. 

In Siam 800 cowries equal one fuang; 2 fuango equal i salung; 
4 salungo equal i bat or tical ; 4 bats equal i tamling ; 20 tamling equal i 
chang; 50 chang equal i hap; 100 hap equal i tara. 

Cowries Talso called bia in Siam) are the well-known shells used in 
many parts of Asia and Africa as a medium of exchange for small values. 
In Siam about 220 are reckoned equal to i penny sterling, which corresponds 
closely to the general rating of the bat or tical at 2s. 6d. sterling. This is, 
however, more than the actual average value of the coin, which is 58.18 
cents. 

Small pewter and copper coins have been introduced as a substitute for 
the cowry shell- The pewter coins are called lot and at. They are small 
flat bits of pewter. Two lots equal i at. The copper coin 2 ats, about the 
same size as the English halfpenny, only a little thicker, is called song peis. 
Two song peis equal i fuang. The fuang and salung are flat pieces of silver ; 
simply weights of the metal. It is the same with the bat. The coin 
called bat or tical is a small bit of a silver bar bent and with the ends 
beaten together. It has two or three small stamps impressed upon it. The 



358 



SMITH'S FINANCIAL DICTIONARY. 



weight of the bat or tical ranges, between 212 and 236 grains troy and is 
generally taken at 236 grains (15.292 grams). 

The fineness of the tical, as well as that of the fuang and salung, aver- 
age 906.25, it is said. Taking the average weight of the tical or bat at 224 
grains, the average fineness of the coin at 906.25 the metallic value may be 
computed at 2s. 3.4325d. sterling (at 6od. per ounce British standard silver). 
This corresponds closely to the rating of the tical by the merchants in the 
Siamese ports, where 7 ticals are reckoned equal to 4 Spanish piasters or 
dollars. The mint at Bangkok lately exchanged Mexican dollars against 
ticals at the rate of 5 ticals for 3 Mexican dollars. American silver 
dollars are also taken by the mint. They are weighed against Mexican 
dollars and then paid for at the above rate of 5 ticals for 3 Mexican dollars. 

Exchange on Hongkong and Singapore is quoted in per cent premium 
or discount. If the quotations fall to i per cent or more discount Mexican 
dollars are being sent from China to Siam. Exchange on London is quoted 
in shillings and pence per i Mexican dollar. If payments are made in ticals 
it is at the rate of 5 ticals for 3 Mexican dollars. 

SPAIN. 

Spain employs the monetary system of the Latin Union. The 
silver peseta, equivalent to the franc, is the unit. It has the same gold and 
silver coins as the union, with a gold 25-peseta piece added. Gold and the 
5-peseta silver piece are unlimited legal tender; divisional silver coins — i. e., 
all silver coins of less value than 5-francs — only to the amount of 50 pesetas. 

The weight, fineness, etc., of the coins of Spain are as follows : 



GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



100 pesetas 
50 pesetas. 
25 pesetas. 
20 pesetas. 
10 pesetas. 
5 pesetas.. 



Grams. 
32.2580 
16.1290 

8.0645 
6.4516 
3.2258 
1. 6129 



l,000ths 
900 
900 
900 
900 
900 
900 



Grains. \ Grai?ts. 
29.0322 
I4.5161 

7.2580 

5.8064 

2.9032 

1.45 16 



497.8178 

248.9089 

124.4543 

99-5635 

49.7817 

24.8908 



Grains. 

448.0360 

224.0180 

112.0089 

89.6072 

44-8036 

22.4018 



$19.2952 
9.6476 
4-8238 
3.8590 
1.9295 
.9647 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



5 pesetas. . . 
2 pesetas. . . 

Peseta 

50 centimes. 
20 centimos 



Grams. 

25.0000 

10.0000 

5.0000 

2.5000 

1 .0000 



l,000ths I Grams. \ Grai?is. 



900 
835 
835 
835 
835 



22.5000I385.8089 

8.35OOI 154.3235 

4.1750! 77.1617 

2.0875 1 38.5808 

-8350I 15-4323 



Grains. 
347.2280 
128.8607 
64.4300 
32.2150 
12.8860 



$0.9352 
.3470 

•1735 

.0867 

-0347 



SMITH'S FINANCIAL DICTIONARY. 



359 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 

10 centimos. . 
5 centimos. . . 
2 centimos. . . 
I centimo. . . . 


Grams. 

10.0000 
5.0000 
2.0000 
1. 0000 


1 95 per cent cop- 
1 per, 4 per cent 
J tin, and i per 
I cent zinc. 


Grains. 

[154-3235 
j 77.1617 
, 30.8647 
1 15-432^ 


1 To the 
{-amount of 
} 5 pesetas. 


r $0.0192 

1 .0096 

.0038 

I .0019 



SWEDEN. 

For general information as to the money of Sweden see Scandinavian 
Union, The. 

The weight, fineness, etc., of the coins of Sweden are as follows : 



GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
gold 
con- 
tained. 


Value in 

United States 

gold coin. 


20 crowns 


Grams. 
8.9606 
4.4803 
2.2415 


l,000ths 
900 
900 
900 


Grams. 
8.0645 
4.0322 
2.O161 


Grains. 

138.2831 

69.1415 

34-5707 


Grains. 

124-4548 

62.2274 

3I.II37 


$5-3598 
2.6799 
1-3389 


ID crowns 


5 crowns 





SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



2 crowns 
I crown . 
50 ore. . . 
40 ore . . . 
25 ore . . . 
10 ore. . . 



Grams. 


l.OOOths 1 


15.0000 


800 


7.5000 


800 


5.0000 


600 


4.0000 


600 


2.4200 


600 


1.4500 


400 



Grams. \ Grains. 
12.00001231.4853 

6. 0000 1 115.7426 

3.OOO0I 77.1617 

2.4000 1 61.7294 

1.45201 37-3463 

.5800I 22.3769 



Grains. 
185.1882 

92.5941 .1 
46.2970 
37.0376 
22.4077 
8.9507 



$0.4988 
.2494 
.1247 
.0997 
.0603 
.0241 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weighi 


Legal tender. 


Value. 


Bronze. 

5 ore 

2 ore 


Grams. 

8.0000 
4.0000 
2.0000 


1 95 per cent cop- 
; per, 4 per cent 

tin, and i per 

cent zinc. 


Grains. 

[123.4588 
j 61.7294 
I 30.8647 


1 T the 
\ amount of 
j I crown. 


i $0.0133 

j .0053 
' .0026 


I ore 



SWITZERLAND. 

For general information as to the money of- Switzerland see Latin 
Union, The. 

The weight, fineness, etc., of the coins of Switzerland are as follows : 



36o 



SMITH'S FINANCIAL DICTIONARY. 



GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 

United States 

gold coin. 



100 francs 
50 francs. 
20 francs. 
10 francs. 
5 francs. . 



Grams. \ l,000tlis 
900 
900 
900 
900 
900 



32.2580 

16.1290 

6.4.516 

3.22581 

I.6129I 



Grams. \ Grains. 

29.0322 497.8178 

14.5 161 1248.9089 

5. 8064 1 99.5635 

2.9O32I 49.7817 

I.4516I 24-.8908 



Graifts. 
448.0360 
224.0180 
89.6072 
44.8036 
22.4018 



$19.2952 

9.6476 

3.8590 

1.9295 

.9647 



SILVER. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 

silver 
con- 
tained. 


Value com- 
pared with 
silver in 
United States 
silver dollar. 


5 francs 

2 francs 

I franc 

50 centimes 

20 centimes 


Grams. 
25.0000 
10.0000 
5.0000 
2.5000 
1. 0000 


l.OOOths 
900 

835 
835 
835 
835 


Grams. 

22.5000 

8.3500 

4.1250 

2.0875 
0.8350 


Grains. 
385-8089 

154-3235 
77.1617 
38.5808 
15-4323 


Grains. 
347.2280 
128.8601 
64.4300 
32.2150 
12.8860 


$0.9352 
.3470 

•1735 
.0867 
.0347 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 


Grams. 




Grains. 






20 centimes . . . 


4.0000 


.^ Pure nickel. 


61.7294 


1 T the 
^ amount of 
J 10 francs. 


r $0.0385 


10 centimes. .. 


3.0000 


175 per cent cop- 
J per and 25 per 


J 46.2970 
I 30.8647 


^ .0192 


5 centimes. . .. 


2.0000 


\ .0096 






cent nickel. 








Bronze. 












2 centimes .... 
I centime 


2.5000 
1.5000 


95 per cent cop- 
per, 4 per cent 
tin, and I per 
cent zinc. 


i 38.5807 
\ 23.1485 


iTo the 
r amount of 
' 2 francs. 


i .0038 
1 .0019 



TURKEY. 

The monetary system of Turkey is bimetallic, with the piaster, equal 
to 40 paras 3 aspes, as the unit. The lOO-piaster piece or gold medjidie 
is called the Turkish pound. 

The weight, fineness, etc., of the coins of Turkey are as follows : 

GOLD. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Pure 
weight. S^^i 
tained. 


Value in 

United States 

gold coin. 


5 lira (500 piasters).. . 
2>4 lira (250 piasters). 
Lire (100 piasters) . . . 
^ lira (50 piasters) . . 
Ya lira (25 piasters) .. . 


Grains. 
36.0820 
18.0410 
7.2164 
3.6082 
1. 8041 


l,000ths 
916^ 
916I 

9i6§ 
9i6i 
9i6§ 


Grants. 
33.0751 

16.5375 
6.6150 

3.3075 
1.6537 


Grains. 

556.8302 

278.4151 

1 11.3660 

55.6830 

27.8415 


1 Grains. 
510.4277 
255.2138 
102.0855 
51.0422 
25-5213 


$21.9822 
10.991 1 

4.3964 
2.1982 
1. 0991 



SMITH'S FINANCIAL DICTIONARY. 



361 



SILVER. 



Denomination. 



Weight. 


Fine- 
ness. 


Fine 
wgt. 


Weight. 


Pure 
silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



20 piasters 

10 piasters 

5 piasters 

2 piasters 

Piaster 

Y2 piaster (20 paras) . 



Grains. 


l,000tlis 


Grains. 


Grains. 


Grains. 


24.0550 


830 


19.9656 


371.2253 


308.1170 


12.0275 


830 


9.9828 


185.6126 


154.0585 


6.0137 


830 


4.9914 


92.8063 


77.0292 


2.4055 


830 


1.9965 


37.1225 


30.8117 


1.2027 


830 


.9982 


18.5612 


15.4058 


.6013 


830 


.4991 


9.2806 


7.7029 



$0.8299 

.4149 
.2074 

.0829 

.0414 

.0207 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Bronze. 

I piaster (40 

paras) 

Y2 piaster (20 

paras) .... 
Y^ piaster (10 

paras) .... 
Yz piaster (5 

paras) .... 
1-40 piaster ( I 

para) 


Gravis. 
21.3860 
10.6930 

5-3470 
.5346 


^Fine copper. 

^ 95 per cent cop- 
1 per, 3 per cent 
\ tin, 1Y2 per 
1 cent lead, and 
J Y2 per cent zinc. 


Grail IS. 
1 330.0363 

1 165.O181 

r 82.5090 

- 41.2545 
8.2501 




$0.0043 
0021 






0010 




.0005 
.0001 





UNITED STATES. 

In 1786 the Congress of the Confederation chose as the mone- 
tary unit of the United States the dollar of 375.64 grains of pure silver. 
This unit had its origin in the Spanish piaster or milled dollar, which con- 
stituted the basis of the metallic circulation of the English colonies in 
America. It was not coined, there being at that time no mint in the United 
States. 

The act of April 2, 1792, established the first monetary system of the 
United States. The basis of the system was : The gold dollar, containing 
24.75 grains of pure gold, and stamped in pieces of $10, $5 and $2.50, de- 
nominated, respective!}'', eagles, half-eagles and quarter-eagles ; the silver 
dollar, containing 371.25 grains of pure silver. A mint was established- 
The coinage was unlimited and there was no mint charge. The ratio of 
gold to silver in coinage was i to 15. Both gold and silver were legal 
tender. The standard was double. 

The act of 1792 undervalued gold, which was therefore exported. The 
act of June 28, 1834, was passed to remedy this by changing the mint ratio 
between metals to i to 16.002. This latter act fixed the weight of the gold 
dollar at 25.8 grains, but lowered the fineness from 0.916 2-3 to 0.899225. The 
fine weight of the gold dollar was thus reduced to 23.2 grains. The act of 
1834 undervalued silver, as that of 1792 had undervalued gold, and silver 



362, SMITH'S FINANCIAL DICTIONARY. 

was attracted to Europe by the more favorable ratio of i to 15 1-2. The act 
of January 18, 1837, was passed to make the fineness of the gold and silver 
coins uniform. The legal weight of the gold dollar was fixed at 25.8 grains, 
and its fine weight at 23.22 grains. The fineness was, therefore, changed by 
this act to .900 and the ratio to i to 15.9884-- 

Silver continued to be exported. The act of February 21, 1853, re- 
duced the weight of the silver coins of a denomination less than $1, which 
the acts of 1792, 1834 and 1837 had made exactly proportional to the weight 
of the silver dollar, and provided that they should be legal tender to the 
amount of only $5. Under the acts of 1792, 1834 and 1837 they had 
been full legal tender. By the act of 1853 the legal weight of the half-dol- 
lar was reduced to 192 grains and that of the other fractions of the dollar 
in proportion. The coinage of the fractional parts of the dollar was re- 
served to the government. 

The act of February 12, 1873, provided that the unit of value of the Uni- 
ted States should be the gold dollar of the standard weight of 25.8 grains, 
and that there should be coined besides the following gold coins : A quar- 
ter eagle or 2 1-2-dollar piece; a 3-dollar piece; a half-eagle or 5-dollar piece; 
an eagle or lo-dollar piece; and a double-eagle or 20-dollar piece, all of a 
standard weight proportional to that of the dollar piece. These coins were 
made legal tender in all payments at their nominal value when not below the 
standard weight and limit of tolerance provided in the act for the single 
piece and when reduced in weight were to be legal tender at a valuation 
in proportion to their actual weight. The silver coins provided for by the 
act were a trade dollar, a half-dollar or 50-cent piece, a quarter- dollar and 
a lo-cent piece ; the weight of the trade dollar to be 420 grains troy ; the half- 
dollar 12 1-2 grams ; the quarter-dollar and the dime, respectively, one-half 
and one-fifth of the weight of the half-dollar. The silver coins were made 
legal tender at their nominal value for any amount not exceeding $5 in any 
one payment. The charge for converting standard gold bullion into coin 
was fixed at 1-5 of i per cent. Owners of silver bullion were allowed 
to deposit it at any mint of the United States to be formed into bars or 
into trade dollars and no deposit of silver for other coinage was to be re- 
ceived. ^ 

Section II of the joint resolution of July 22, 1876, recited that the trade 
dollar should not thereafter be legal tender and that the Secretary of the 
Treasury should be authorized to limit the coinage of the same to an amount 
sufficient to meet the export demand for it. The act of March 3, 1887, re- 
tired the trade dollar and prohibited its coinage ; that of September 26, 1890, 
discontinued the coinage of the i-dollar and 3-dollar gold pieces. 

The act of February 28, 1878, directed the coinage of silver dollars of 
the weight of 412 1-2 grains troy, of standard silver, as provided in the act of 
January 18, 1837, and that such coins, with all silver coins theretofore 
coined, should be legal tender at their nominal value for all debts and dues, 
public and private, except where otherwise expressly stipulated in the con- 
tract. • 

The Secretary of the Treasury was authorized and directed by the first 
section of the act to purchase from time to time silver bullion at the market 



SMITH'S FINANCIAL DICTIONARY. 



363 



price thereof, not less than $2,000,000 worth nor more than $4,000,000 worth 
per month, and to cause the same to be coined monthly, as fast as purchased, 
into such dollars. A subsequent act, that of July 14, 1890, enacted that the 
Secretary of the Treasury should purchase silver bullion to the aggregate 
amount of 4,500,000 ounces, or so m.uch thereof as might be offered, each 
month, at the market price thereof, not exceeding $1 for 371.25 grains of 
pure silver, and to issue in payment therefor Treasury notes of the United 
States, such notes to be redeemable by the government, on demand, in coin, 
and to be legal tender in payment of all debts, public and private, except 
where otherwise expressly stipulated in the contract. The act directed the 
Secretary of the Treasury to coin each month 2,000,000 ounces of the silver 
bullion purchased under the provisions of the act into standard silver dol- 
lars until the ist day of July, 1891, and thereafter as much as might be 
necessary to provide for the redemption of the Treasury notes issued under 
the act. The purchasing clause of the act of July 14, 1890, was repealed by 
the act of November i, 1893. 

The act of June 9, 1879, made the subsidiary silver coins of the United 
States legal tender to the amount of $10. The minor coins are legal tender 
to the amount of 25 cents. 

The weight, fineness, etc., of the coins of the United States are as 
follows : 

GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Value. 



Double eagle ($20) 

Eagle ($10) 

Half eagle (S5) 

Quarter eagle ($2.50) 

One dollar (no longer coined) 



Grains. 


l,000ths 


Grains, j 


516.0000 


900 


464.4OOOJ 


258.0000 


900 


232.2000 


129.0000 


900 


II6.IOOO 


64.5000 


900 


58.0500 


25.8000 


900 


23.2200 



$20.00 
10.00 

5-00 

2.50 

1. 00 



SILVER. 



Denomination. 


Weight. 


Fine- 
ness. 


Fine 
wgt. 


Value. 


Dollar 


Grains. 

412.5000 

192.9000 

96.4SOO 

38.5800 


l.OOOths 1 Grai7ts. 
900371.2500 
900 T7'?.6lOO 


1 

$1.00 

•50 


Half dollar 


Quarter dollar 

Dime 


900 
900 


86.8050 
34.7220 


.25 

.10 



MINOR COINS. 



Denomination. 


Weight. 


Composition. 


Weight. 


Legal tender. 


Value. 


Nickel. 
5 cents 


Graffis. 


75 per cent cop- 
per and 25 per 
cent nickel. 

95 per cent cop- 
per, 3 per cent 
tin, and 2 per 
cent zinc. 


Grains. 
77.1600 

48.0000 


To the 
- amount of 
25 cents. 


] $0.01^00 


Bronze. 
I cent 




.0100 







364 



SMITH'S FINANCIAL DICTIONARY. 



The following table shows the authority for coining and for changing 
the weight and fineness of the coins of the United States : 



Denomination. 


Act authorizing 

coinage or change 

in weight or 

fineness. 


Weight 
(grains) . 


Fineness. 


Act discontinuing 
coinage. 


Gold coins. 

Double eagle ($20) . . 
Eas-le CSlo) 


March 3, 1849. .. 
April 2, 1792. . . . 
June 28, 1834. . . 
January 18, 1837. 

April 2, 1792 

June 28, 1834. . .. 
January 18, 1837. 

April 2, 1792 

June 28, 1834 

January 18, 1837. 
February 21,18^:3. 
March 3, 1849. . . 

April 2, 1792. . . . 
January 18, 1837. 
February 28,1878. 
July 14, 1890. . . . 


516 
270 
258 

135 
129 

67.5 
64.5 

77.4 
25.8 

416 
412^ 


.900 

•916I 

.899225 

.900 

.016^ 

.899225 

.900 

•916I 

.899225 

.900 

.900 

.900 

.8924 
.900 




Half eagle ($5) 

Quarter eagle ($2.50) 

Tnree-dollar niece. . .. 
One dollar 


Sept. 26, 1890. . . 
Sept. 26, 1890. . . 


Silver coins. 
Dollar 




February 12, 1873 










Trade dollar 


February 12,1873. 
March 3, 1899. .. 
April 2, 1792. .. . 
January 18, 1837. 
February 2i,i§53. 
February 12,1873. 
August 5, 1892. . 

April 2, 1792 

January 18, 1837. 
February 2i,i8i;3. 
February 12,1873. 

March 3, 1893. . . 
March 3, 1875... 
April 2, 1792. . . . 
January 18, 1837. 
February 21,1853. 
February 12,1873. 
April 2, 1792. .. . 
January 18, 1837. 
February 21,1853. 
March 3, 1851. .. 
March 3, 1853... 

May 16, 1866 

March 3, 1865.. . 
April 22, 1864.. . 

April 2, 1792 

January 14, 1793. 
Jan. 26. 1796 (c) 
February 21,1857. 
April 22, 1864. . . 
April 2, 1792. . . . 
January 14, 1793. 


420 

412^^ 

208 

206^ 

192 

192.9 

192.9 

104 

I03>^ 
96 

96.45 

96.45 

77.16 

41.6 

41^ 

38.4 

38.58 

20.8 

20^ 

19.2 

12M 
11.52 

77.16 

30 

96 
264 
208 
168 

72 

48 
132 
104 


.900 
.900 
.8924 
.900 


March 3, 1887. 


Lafayette dollar 

Half dollar 












Columbian half dollar 
Quarter dollar 


.900 

.8924 

.900 










Columbian quarttr 

dollar 

Twenty-cent piece 

Dime 


.900 
.900 
.8924 
.900 


May 2, 1878. 












Half dime 


.8924 
.900 






February 12, 1873 


Three-cent piece 

Minor coins. 

Five-cent (nickel) . . . 
Three-cent (nickel) . . 
Two- cent (bronze) . . 
Cent (coDper) 


•750 
.900 

(a) 
(a) 
(b) 


February 12, 1873 

Sept. 26, 1890. .. 
February 12, 1873 












February 21, 1857 


Cent (nickel) 

Cent (bronze) 

Half cent (copper).. 


(d) 
(b) 


April 22, 1864. 










Jan. 26, 1796 (c) 


84 




February 21, 1857 



I 



SMITH'S FINANCIAL DICTIONARY. 



365 



Notes to table on preceding page. 

(a) Composed of 75 per cent copper and 25 per cent nickel. 

(b) Composed of 95 per cent copper and 5 per cent tin and zinc. 

(c) By proclamation of the President, in conformity with act of March 

3, 1795- 

(d) Composed of 88 per cent copper and 12 per cent nickel. 

URUGUAY. 

This country has the single gold standard. The unit is the gold 
peso of 1.697 grams, .916 2-3 fine, its value being $1.08.04. The silver 
peso is of 25 grams .900 fine and is therefore equal to the French silver 
5-franc piece. Smaller coins are exact subdivisions and are of the denom- 
inations of 50, 20 and 10 centesimos. United States, British and some 
other European gold coins circulate. 

VENEZUELA. 

The unit is the silver venezolano or peso, divided into 100 centavos. 

The ratio of gold to silver is i to 15 1-2. The only difference between 
the French monetary system and that of Venezuela is that whereas the 
French 5-franc piece is unlimited legal tender the 5-bolivar piece or ven- 
ezolano is legal tender only to the amount of 500 bolivars or about $100 
in United States gold coin. In this respect Venezuela is more like a single 
gold standard country. It is, however, generally classed as a double stan- 
dard country. 

The weight, fineness, etc., of the coins of Venezuela are as follows : 

GOLD. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 
gold 
con- 
tained. 



Value in 
United States 
gold coin. 



100 bolivars 
50 bolivars. 
20 bolivars . 
10 bolivars. 
5 bolivars. . 



Grams. \ l.OOOths I Gravis. I Grains. \ Grains. 



32.2.S80 

16.1290 

6.4.516 

3.2258 

I.6129 



900 29.0322 
900I14..5161 

900! c;.8o64 
900 1 2.9032 
900I 1. 45 16 



497.8178 

248.9089 

99-5635 

49.7817 

24.8908 



448.0360 

224.0180 

89.6072 

44.8036 

22.4018 



$19.2952 

9.6476 

3-8590 

1.9293 

.9647 



SILVER. 



Denomination. 



Weight. 



Fine- 
ness. 



Fine 
wgt. 



Weight. 



Pure 

silver 
con- 
tained. 



Value com- 
pared with 
silver in 
United States 
silver dollar. 



5 bolivars. . . 
2 bolivars. . . 

Bolivar 

Half bolivar. 
Fifth bolivar 



Grams. 


i.OOOths 


25.0000 


900 


10.0000 


835 


5.0000 


83< 


2.5000 


835 


1. 0000 


835 



Grams. \ Grains. \ Graifis. 
22.5OOOI385.8089 347.2280 
8.35O0I 154.3235 128.8601 
4. 1 750 1 77.1617 64.4300 
2.08751 38.5808 32.2150 
.8350I 15-4323 I2.8860I 



$0.9352 
■3470 
•1735 
.0867 

•0347 



366 SMITH'S FINANCIAL DICTIONARY. 

Money toi move the crops. This term means the money 
employed to pay for the crops when they are taken out of the 
hands of the farmers and sent to the general markets. 

At the seasons of the year when the grain and cotton crops 
are ready for sale large amounts of money are usually shipped 
from the great money centres to the districts where the crops 
are raised. When the farmers (and planters, as growers of 
cotton are called) have been paid for their products and they 
in turn pay off their own debts or make purchases which 
have been postponed until the receipt of the money or when 
they deposit the money in the local banks it begins to flow 
back to the money markets, where it finds employment and 
earns interest until needed to move the next crops. 

The movement of money from New York and other Eastern 
financial centres to the great grain producing regions of the 
West, Northwest and Southwest and to the cotton producing 
regions of the South and Southwest is an important annual 
occurrence. It usually begins the latter part of August and 
continues until the fore part of November and it is not until 
December that it begins, in any volume, to return to New 
York and the other Eastern financial centres. 

There is, in the first place, a need for money by the farmers 
who grow grain and by the planters who grow cotton to pay 
their hands ; but the large need for money is to pay the farmers 
for their grain and the planters for their cotton. The farmers 
and the planters borrow from their local banks to pay their 
hands and the shippers who buy from the farmers and 
planters also borrow from the local banks to make payment to 
the farmers and the planters. 

The local banks send to the banks in New York and else- 
where in the East for money. The local banks may have 
balances to their credit in the New York and Eastern banks, 
in which case they obtain money that belongs to them. Often 
they rediscount paper (promissory notes and drafts) with the 
New York and Eastern banks — that is, they resell paper which 
they themselves had bought and thus obtain money. The 
local banks may obtain money from banks in large cities near 
at home in the West and South, but in such a case the banks 
from which they obtain money turn to the New York and other 
Eastern banks to replenish their own supplies so that the re- 



SMITH'S FINANCIAL DICTIONARY. 367 

suit is the same as if the local banks had themselves obtained 
the money direct from the New York and Eastern banks. 

The effect is to denude New York and other Eastern centres 
of money. The banks in these centres have to deny their reg- 
ular borrowers, or at least curtail the accommodation extended 
to them, and in addition they have to demand the return of 
call money (money loaned for an indefinite period, which is 
subject to return on the demand of the lender). The result is a 
scarcity of money for general business and also for specula- 
tive operations. Naturally rates advance and both business 
and speculation are restricted. 

Most of the money sent from New York to the West and 
South is forwarded in three ways. One way is for a bank 
in New York to deposit money in the Sub-Treasury in New 
York which orders by telegraph the Sub-Treastiry in Chicago 
or New Orleans to pay it out to the banks for which it is in- 
tended. (Each order for the transfer of money is first sent to 
the Treasury in Washington and is then repeated to the Sub- 
Treasury which is to make payment). Another way is to for- 
ward the money by express and a third way is to send by reg- 
istered mail. The larger part of the money is perhaps for- 
warded by express. The methods of forwarding money from 
other Eastern centres are the same except that it cannot be 
transferred through Sub-Treasuries from points where there 
are not Sub-Treasuries. 

The chief requirement in moving the crops is for money of 
small denominations and the consequence in some years has 
been almost a famine in small bills (money of small denomina- 
tions) in New York and elsewhere in the East. 

When money begins to return from the West and South a 
relaxation in money eiisues at New York and the other East- 
ern centres. 

Monometalism. Exists in a country when the currency of 
the country is based on a single metal, as either gold or silver. 

Month. In business a month is usually considered as con- 
sisting of 30 days. 

In time loans (loans running for a specified time) 30 days 
are counted as a month. In call loans, however, interest is 
calculated for the number of days they actually run. 

In dealing in futures (contracts maturing in the future) 



368 SMITH'S FINANCIAL DICTIONARY. 

in grain, cotton, coffee, etc., it is the practise to designate 
the contracts by the names of the months in which they 
mature. Thus, wheat sold for delivery in January is called 
January wheat; cotton sold for delivery in July is called July 
cotton, and so on. 

Monthly crop report. See Government crop report; also 
see Weather-crop report. 

Moratorium. An emergency act of legislation authorizing 
a government bank to suspend or defer specie payments for a 
given period. The term also is loosely applied to an edict by 
a government permitting a delay for a specified period in the 
payment of public, corporate or even private debts. 

Mortgage. A mortgage is a lien or a conveyance for the 
security of a debt, which becomes void upon the payment of 
the debt. For additional information see Bond. 

Mortgage deed. A deed held as a mortgage. 

Mortgagee. The grantee under a mortgage ; the one to 
whom the mortgage is executed. 

Mortgagor. The one who mortgages property. 

Motive power. The motive power of a railroad consists of 
its locomotives. 

Movable exchange. If foreign exchange is quoted and also 
is payable in the money of the country where collection is to 
be made it is called movable exchange. For instance, ex- 
change on Paris is quoted in francs in New York and is 
therefore movable exchange. The dollar is the basis and the 
franc fluctuates instead of the dollar in which it is reckoned. 

The opposite of movable exchange is fixed exchange ; see 
Fixed exchange. 

Movement of gold. The export and import movement of 
gold. See Gold exports and imports. 

Moving the crops. Taking them out of the hands of the 
farmers and sending them to general markets. For additional 
information see Money to move the crops. 

MTG. As printed on the tape by the stock ticker these 
letters mean mortgage, as first mortgage bonds, second mort- 
gage bonds, etc. 

Municipal bonds. Those issued by a borough, town or 
city possessed of a charter of incorporation conferring privi- 
leges of local self-government. 



SMITH'S FINANCIAL DICTIONARY. 369 

Mutual deposits on a contract. In any contract on an ex- 
change either broker party to it may call at any time dur- 
ing the continuance of it for a mutual deposit (a deposit by 
both) of (usually) 10 per cent. If the market price of the 
security or commodity covered by the contract changes so as 
to reduce the margin of either party below 5 per cent the 
other party may demand a restoration of the impaired margin 
to 10 per cent. This demand may be repeated as often as the 
margin is reduced. 

Mutual savings bank. A mutual savings bank is one con- 
ducted wholly for the benefit of the depositors, who receive in 
the form of interest all profits over and above necessary ex- 
penses and a moderate part of the profits set aside in a sur- 
plus fund to provide for unexpected losses or contingencies. 



N 



N. As printed on the tape by the stock ticker this letter 
means ncAv or north. 

Name. London Stock Exchange term ; a memorandum is- 
sued by a purchasing broker giving the name, address and de- 
scription of his client to whom the stock bought is to be trans- 
ferred. See Name day. 

Name day. Same as ticket day; the third day of the fort- 
nightly settlement on the London Stock Exchange, when the 
purchasing broker (as distinguished from the jobber) passes 
(hands) to the jobber who made the sale a ticket (memoran- 
dum) bearing the name, address and description of the per- 
son to whom the stock is to be transferred and also stating 
the name of the stock exchange firm which will pay for the 
stock on delivery. The ticket is passed on until it arrives in the 
hands of the broker who originally sold the stock, who is thus 
enabled to draw up the transfer deed (as the certificate of 



370 SMITH'S FINANCIAL DICTIONARY. 

transfer or assignment is called) and deliver it to the actual 
buyer. See Passing a name. 

Naming a price. The commoner expression is making a 
price ; see Making a price. 

Napoleon. A colloquial name for the 20-franc gold piece 
of France, equal to $3,85.90; the name is derived from a cor- 
responding coin that was issued under the empire. 

National bank. A bank deriving its authority to do busi- 
ness from the Federal government ; its charter is obtained 
from the Comptroller of the Currency. 

The present national banking system was the outcome of 
the financial requirements of the government in the Civil War, 
when it was found necessary to create a market for United 
States bonds. Most of the state banks had suspended specie 
payments and it was difficult for the government to borrcv 
money. 

The National bank act was passed on February 25, 1863, and 
was radically amended in the following year. It provided for 
the incorporation of banks under Federal supervision with a 
minimum capital of $50,000. The life of each institution was 
limited to 20 years and it was permitted to use the word "na- 
tional" as part of its title, while other banks were prohibited 
from using the word. Each bank was compelled to invest at 
least $30,000 of its capital in United States bonds, in consid- 
eration of which it was privileged, by depositing the bonds 
with the Treasurer of the United States, to issue circulating 
notes (known as national bank notes) to an amount equal to 
90 per cent of the par value of the bonds so deposited. 

In practise the operation of the law was so slow that the 
government derived little immediate benefit from the sale of 
bonds for note security, the total amount taken for that pur- 
pose up to April, 1865, being, in round numbers, only $100,- 
000,000. Other and great benefits did arise, however, in the 
unification of the banking system and the establishment of a 
careful and exacting government supervision. As soon as 
the first difficulties of administration had been overcome 
banks began to come in rapidly and by the close of 1865 over 
1,500 charters had been granted — more than the total number 
of all banks in operation in the United States three years be- 
fore. 



SMITH'S FINANCIAL DICTIONARY. 371 

Since then the growth of the system has been steady and 
the operation of the law on the whole satisfactory. From time 
to time amendments have been made to the law as imperfec- 
tions and inadequacies developed. By the gold standard act of 
March 14, 1900, the minimum authorized capital for national 
banks was reduced to $25,000 and permission was given to is- 
sue circulating notes to the par value of the bonds deposited 
for security. 

The weakest point in the system has always been that re- 
lating to the issue of circulating notes. The high prices at 
which United States bonds have sold and the taxes and other 
expenses attached to the issuing of the notes all combined to 
make the operation nearly profitless. In fact many banks 
made the required deposit of bonds without taking out cir- 
culation rather than go through all the labor involved for a 
nominal profit. The gradual extinction of the public debt has 
also operated to contract bank circulation and will eventually 
extinguish it unless authority is given to the banks to issue 
currency against their general assets. Some of the plans ad- 
vanced for attaining this end will be found under the head 
Asset currency. 

The places in w^hich national banks are situated are divided 
into three classes — places that are not reserve cities, reserve 
cities and central reserve cities. Places that are not reserve 
cities comprise the greater number. National banks in these 
places are unofficially designated as country banks and are 
required to maintain in cash a reserve of (keep on hand) 15 
per cent of the amount on deposit with them, three-fifths 
of which reserve may be deposited by them in banks in reserve 
or central reserve cities. Reserve cities are cities of more 
importance, at least as financial centres, than the places that 
are not reserve cities. National banks in reserve cities are 
designated as reserve banks and must maintain a reserve of 
25 per cent of their deposits, one-half of which may be de- 
posited in banks in central reserve cities. Central reserve 
cities are the chief financial centres, of which New York is 
foremost. National banks in these cities are designated as 
central reserve banks and must maintain a reserve of 25 per 
cent. 



372 SMITH'S FINANCIAL DICTIONARY. 

Reserve cities are Albany, Baltimore, Boston, Brooklyn, 
Cincinnati, Cleveland, Columbus, Denver, Des Moines, Detroit, 
Houston, Indianapolis, Kansas City, Kan., Kansas City, Mo., 
Lincoln, Los Angeles, Louisville, Milwaukee, Minneapolis, 
New Orleans, Omaha, Philadelphia, Pittsburg, Portland, Ore. ; 
St. Joseph, St. Paul, San Francisco, Savannah, Washington. 
Central reserve cities are Chicago, New York, St. Louis. 

Under the National bank act the maximum amount which a 
national bank may loan to any one person, firm or corpo- 
ration is an amount equal to lo per cent of its capital, but the 
discount of bills of exchange drawn against actual values and 
the discount of commercial or business paper actually owned 
by the person negotiating it is not considered as money bor- 
rowed. 

For additional information see National bank act. 

National bank act. Section i of the act of June 20, 1874, 
provides that the act entitled *'An act to provide for a national 
currency secured by a pledge of United States bonds, and to 
provide for the circulation and redemption thereof, approved 
June 3, 1864, shall be known as the 'National bank act.' " 

Following are the main features of the National bank act, as 
amended, and of other laws relating to national banks : 

The currency bureau in the Treasury Department is charged 
with the execution of laws relating to the issue and regulation 
of national currency (national bank notes). The chief officer 
of this bureau is the Comptroller of the Currency, who performs 
his duties under the general direction of the Secretary of the 
Treasury. He is appointed by the President ; his term of office 
is five years, and his salary is $5,000 a year. He is not per- 
mitted to have any interest in a national bank. 

Any number of persons, not less than five, may organize a 
national bank, subject to the approval of the Comptroller of 
the Currency. The term of existence of a national bank is 
twenty years, but the term may be renewed for another twenty 
years as often as it expires. A capital of not less than $200,000 
is required in a city with a population exceeding 50,000; a 
capital of not less than $100,000 is required in a city with a 
population between 6,000 and 50,000 ; a capital of not less than 
$50,000 is required in a place with a population between 3,000 



SMITH'S FINANCIAL DICTIONARY, 373 

and 6,000, and a capital of not less than $25,000 is required in a 
place with a population not exceeding 3,000. The stock must be 
in shares of $100 each. A national bank must deposit with the 
Treasurer of the United States as security for its circulating 
notes an amount of United States registered bonds not less 
than one-fourth of its capital where the capital is $150,000 or 
less and must deposit not less than $50,000 in bonds where the 
capital is in excess of $150,000. 

Every director of a national bank must be the owner in his 
own name of at least ten shares of stock and one of the direc- 
tors must be president of the board. 

Any state bank may become a national bank and the shares 
of its capital stock may continue to be for the same amount as 
they were before its conversion into a national bank, but the 
capital cannot be for a less amount than prescribed for a bank 
organized under the National bank act. A converted state 
bank having branches may retain and keep in operation its 
branches. 

For the contracts, debts and engagements of a national bank 
the stockholders are individually responsible to the extent of 
their holdings of stock at its par value in addition to the 
amount invested in the stock, except that shareholders of a con- 
verted state bank with a capital of not less than $5,000,000 paid 
in and a surplus of 20 per cent on hand are liable only to the 
amount of their shares. 

A national bank is entitled to receive from the Comptroller 
of the Currency and issue circulating notes equal in amount to 
the par value of United States bonds deposited with the Treas- 
urer. The amount of such notes, however, cannot exceed the 
amount of the bank's capital. The bank must keep on deposit 
with the Treasurer an amount of lawful money equal to 5 per 
cent of its circulation (circulating notes) for the redemption of 
its notes. On the retirement (withdrawal) by a bank of any 
part of its circulation United States bonds for an equal amount 
on deposit with the Treasurer are restored to it, except that 
the amount of bonds deposited to secure circulation can- 
not be reduced below the amount required to be deposited in 
accordance with its capital. Circulation is retired by deposit- 
ing with the Treasurer an equal amount of lawful money for 



37 i SMITH'S FINANCIAL DICTIONARY. 

its redemption. The Treasurer is not permitted to receive in 
any one calendar month more than $3,000,000 in lawful money 
altogether for the retirement of circulation. 

Circulating notes of national banks may be presented in 
sums of $1,000 or multiples to the Treasurer of the United 
States for redemption. United States notes (greenbacks) are 
delivered in exchange for the bank notes. 

A national bank pays in January and again in July a duty 
(tax) of 1-2 per cent on the average amount of its notes in cir- 
culation, except that the duty is only 1-4 per cent when the 
notes are secured by deposit of United States bonds which bear 
interest at only 2 per cent. The bank makes a report on Decem- 
ber I and again on June i of the average amount of its notes in 
circulation in the preceding six months. A tax of 10 per cent is 
imposed on notes issued by a state bank or any bank not oper- 
ating under the National bank act and on notes issued by an 
individual, firm or corporation. [The effect of this heavy tax 
is to prohibit the issuance of circulating notes except by 
national banks]. 

A national bank in a central reserve city must keep on hand 
in lawful money a reserve of 25 per cent (an amount equal to 
25 per cent of its deposits) ; a national bank in a reserve city 
(as distinguished from a central reserve city) must keep on 
hand a reserve of 25 per cent, one-half of which may be on de- 
posit in national banks in central reserve cities ; a national 
bank that is not in a central reserve or reserve city must keep 
on hand a reserve of 15 per cent, three-fifths of which may be 
on deposit in national banks in central reserve or reserve 
cities. 

Clearing house certificates representing specie or lawful 
money deposited may be counted in its reserve by a bank 
owning such certificates. The lawful money deposited with 
the Treasurer of the United States for the redemption of its 
notes (equal to 5 per cent of its outstanding notes) may be 
counted in its reserve. [A national bank cannot count in its 
reserve national bank notes whether they are its own notes or 
the notes of other national banks]. 

A city with a population of 50,000 may be made a reserve 
city by the Comptroller of the Currency on application b}-- 



SMITH'S FINANCIAL DICTIONARY. s75 

three-fourths in number of the national banks in that city. A 
city with a population of 200,000 may in like manner be made a 
central reserve city. 

The interest or discount rate of a national bank must not 
exceed the rate allowed by law in the state, territory or district 
in which it is located. Where no rate is fixed by law the bank's 
fate cannot exceed 7 per cent. 

A national bank may declare a dividend semi-annually. 
Before declaring a dividend it must carry one-tenth of its net 
profits in the preceding half-year to its surplus fund until this 
fund amounts to 20 per cent of its capital stock. 

The liability of a person, firm or corporation to a national 
bank for money borrowed must not exceed one-tenth of the 
bank's capital. But the discount of bills of exchange drawn in 
good faith against actual values and the discount of com- 
mercial or business paper actually owned by the person negoti- 
ating it is not considered as money borrowed. 

A national bank cannot loan money on or purchase shares of 
its own stock. 

A national bank must not pay out in dividends an amount in 
excess of its net earnings. 

A debt due to a national bank on which interest is past due 
and unpaid for a period of six months, unless the debt is well 
secured and is in process of collection, is, under the law, a bad 
debt. 

Impairment of the capital of a national bank must be made 
good by assessment pro rata on the shareholders within three 
months after notice to do so has been received from the Comp- 
troller of the Currency. 

A national bank must make to the Comptroller of the Cur- 
rency in each year not less than five reports of its condition. 
Each report must be of the condition on a past day specified 
by the Comptroller and must be transmitted to the Comptroller 
within five days after the receipt of the request for it. The 
Comptroller has power to call for special reports. 

vShares of the capital stock of a national bank are subject to 
state tax in the state where the bank is located, but the tax 
must not be at a greater rate than is imposed on other moneyed 
capital in the hands of individual citizens of the state ; shares 



376 SMITH'S FINANCIAL DICTIONARY. 

owned by non-residents must be taxed in the place where the 
bank is located. The real property of a national bank is not 
exempt from state, county or municipal tax. 

The Comptroller of the Currency, with the approval of the 
Secretary of the Treasury, may appoint national bank ex- 
aminers, who have power to investigate the affairs of national 
banks and to examine the officers and agents of the banks on 
oath. 

A bank not organized under the national currency laws or 
the National bank act cannot use the word ''national" as part of 
its title, unless it be a savings bank authorized by Congress to 
use the word ''national". 

It is unlawful to imitate national bank notes for advertising 
purposes. 

It is unlawful for an officer, clerk or agent of a national bank 
to certify a check unless the drawer of the check has on de- 
posit in the bank at the time of certification an amount of 
money equal to the amount specified in the check. The penalty 
for false certification is a fine of not more than $5,000 or im- 
prisonment for not more than five years or both. False cer- 
tification also gives to the Comptroller of the Currency power 
to appoint a receiver for the bank. [The prohibition of false 
certification, or overcertification as it is commonly called, is 
frequently disregarded]. 

A national bank may be designated by the Secretary of the 
Treasury as a depository of public money, except receipts from 
customs, under such regulations as may be prescribed by the 
Secretary ; it may also be employed as financial agent by the 
government. The bank must give satisfactory security, by 
the deposit of United States bonds and otherwise, for the safe 
keeping and prompt payment of the public money deposited 
with it, and for the faithful performance of its duties as finan- 
cial agent of the government. 

National bank examiner. Appointed by the Comptroller of 
the Currency, with the approval of the Treasurer of the United 
States. Charges for his services or work are assessed by 
^he Comptroller upon the banks examined. 

There is no statute which makes a national bank examiner 
liable for losses suffered by reason of an embezzlement which 
he failed to discover. 



SMITH'S FINANCIAL DICTIONARY. 377 

National bank note. A note (money) issued by a national 
bank. National bank notes are in denominations of $5, $10, 
$20, $50, $100, $500, $1,000. Among banks these notes are com- 
monly designated as circulation to distinguish them from cur- 
t-ency (money issued by the government). 

National banks can issue only notes furnished by the Fed- 
eral government. Since specie payments were resumed no 
bank has been furnished with notes of a smaller denomination 
than $5. A tax of i per cent per annum, determined semi-an- 
nually, is imposed by the government on national bank notes ; 
when, however, the notes are secured by government bonds 
bearing interest at onlv 2 per cent the tax is only 1-2 per cent 
per annum. 

National bank notes are a legal tender to any and all na- 
tional banks and also to the government, except for duties on 
imports, and they are tenderable by the government for ail 
debts except interest on its bonds. They are redeemable in 
'lawful money" or legal tender. 

To secure these notes the banks issuing them have to de- 
posit a corresponding amount of government bonds with the 
Treasurer of the United States. In addition they are required 
to maintain with the Treasurer a fund equal to 5 per cent of 
their note issues for the redemption of such notes as may be 
presented to the Treasurer. This 5 per cent may be coiuited 
by the banks in their reserves. 

A national bank cannot count national bank notes in its re- 
serve. Whether it holds its own notes or the notes of other 
banks makes no difference ; accordingly it is the rule of banks 
to pay out national bank notes ahead of other kinds of money. 

When a national bank desires to retire its circulation (its 
notes) it deposits with the Treasury money to the amount of 
the circulation to be retired. The Treasury then assumes the 
obligation of redeeming the notes. Some of them will be sent 
in for redemption because they are worn or mutilated and 
those which are received by other national banks will be sent 
in to be exchanged for some form of legal tender money 
which the bank can include, that is, count, in its reserve. Upon 
the deposit of money by a bank to redeem its circulation the 
"United States bonds held by the Treasurer to secure the circu- 



S7S SMITH'S FINANCIAL DICTIONARY. 

lation are reassigned to it. Redeemed circulation is destroyed. 

A national bank which is winding up must deposit money 
with the Treasurer of the United States to redeem its out- 
standing circulation, except when winding up for the purpose 
of consolidating with another bank ; in such a case, however, 
its assets and liabilities must be reported by the bank with 
which it is in process of consolidation. 

National bank rep'ort. Five reports a year are required to 
be mailed to the Comptroller of the Currency by each national 
bank, verified under oath by the president and cashier and 
attested by at least three directors, giving in detail the re- 
sources and liabilities of the bank on any day specified by the 
Comptroller. When the Comptroller calls for a report it is al- 
ways for a report of the condition of the bank on a past day 
and not on a future day. The report must be mailed to the 
Comptroller within five days after request is made for it. 
. National bank tax. The government levies an annual tax 
of I per cent on the circulation of a national bank (the tax is 
only 1-2 per cent when the circulation is secured by deposit 
of government bonds bearing interest at only 2 per cent). 
The tax is collected semi-annually (January and July) and is 
based on the average amount of circulation. The shares of a 
national bank are subject to a state tax and its real property 
is subject to state, county or municipal tax. 

National currency. Another name for national bank notes ; 
see National bank note. 

National debt. Same as public debt ; the debt due from a 
nation to individual creditors. 

The national debt of the United States consists of bonds, 
United States notes (greenbacks), old demand notes (nofes 
issued prior to the present United States notes), national bank 
notes for the redemption of which money has been deposited 
by the issuing banks, fractional currency, gold certificates, 
silver certificates and Treasury notes (issued for the purchase 
of silver bullion). 

National gold bank. National gold banks were authorized 
by the bank act of 1864 (for the Pacific slope), their notes to be 
payable in gold and none to be issued of a denomination less 
than $5. The issuance of notes was limited to 80 per cent of 



SMITH'S FINANCIAL DICTIONARY. 379 

the par value of government bonds deposited in the Treasury 
of the United States. The act of February 14, 1880, provided 
for the conversion of these banks into regular national banks. 

National loan. An issue of bonds by a government. 

NB. As printed on the tape by the stock ticker these let- 
ters mean new bonds. 

Negotiable. That which may be transferred by mere de- 
livery or by assignment. 

Neg'otiable instrument. An instrument that may be ne- 
gotiated ; specifically, in law, an instrument transferable by as- 
signment, indorsement or delivery. 

There are but three forms of negotiable instruments in com- 
mon use, viz : Check, bill of exchange (draft) and promis- 
sory note. 

An instrument to be negotiable must contain an uncondi- 
tional promise or order to pay a certain sum in money; must 
be payable on demand or at a fixed or determinable future 
time ; must be payable to order or to bearer ; and when the 
instrument is addressed to a drawee he must be named or in- 
dicated therein with a reasonable certainty. 

An instrument which contains an order or promise to do 
any act in addition to the payment of money is not negotiable. 
But the negotiable character of an instrument is not affected 
by a provision which authorizes the sale of collateral securities 
in case of failure to pay at maturity or authorizes a confession 
of judgment if not paid at maturity or waives the benefit of any 
law intended for the advantage or protection of the obligor 
(the one upon whom the obligation to pay rests) or gives the 
holder the privilege of requiring something to be done in 
lieu of payment of money. 

The validity and negotiable character of an instrument are 
not affected by the fact that it is not dated or does not speciCy 
the value given or that any value has been given or does not 
specify the place where drawn or where payable or bears a 
seal or designates a particular kind of current money in which 
payment is to be made. 

The maker or drawer or the payee or drawee (the one who 
is to pay) and the acceptor may be the same person and if 
that person indorses the instrument and puts it in circulation it 
becomes a negotiable instrument. 



38o SMITH'S FINANCIAL DICTIONARY. 

A negotiable instrument can be enforced for its full amount 
against the maker or acceptor regardless of any offsetting 
claim. 

If the amount stated in words and the amount stated in 
figures do not agree the words govern. 

A time instrument falling due on Sunday or a holiday (iji- 
cluding Saturday where Saturday is a half-holiday) is payable 
on the next business day. An instrument payable on demand 
is payable during business hours on a Saturday half-holiday. 

Also see Non-negotiable instrument. 

Net. Clear of all charges or deductions, as actual profit 
or actual loss. The net earnings of a stock company are the 
earnings left after deducting expenses. 

Brokers in the outside or curb market in stocks often take 
an order net, which means that the customer will deliver or 
receive the stock, as the case may be, at a fixed price. The 
broker receives no commission but is allowed to make as 
much on the transaction for himself as he can. 

Net cash. The term "net cash," in its original meaning, 
calls for payment upon delivery of the goods. In many mar- 
kets sellers have fallen into the habit of allowing to buyers for 
cash lo or some other definite number of days, so that "cash" 
is interpreted to mean payment at any time within that num- 
ber of days. Thus, it has become necessary to invent another 
term for what "cash" formerly meant and "net cash" or "spot 
cash" is employed for this purpose. 

"Cash" with or without the accompanying adjective "net" 
or "spot" means prompt payment upon delivery unless tHe 
parties to the contract have been in the habit of interpreting it 
in some other sense in their dealings with each other or un- 
less the common market usage has imparted to it another 
meaning; then, some other word must be found to signify 
prompt payment. 

Net earnings. Earnings which remain after expenses neces- 
sary to secure total or gross earnings have been deducted. 

Net gold. Same as free gold ; the amount of gold held in 
the Treasury of the United States in excess of the sum re- 
quired to redeem gold certificates outstanding. Net gold in- 
cludes the $150,000,000 gold reserve. 



SMITH'S FINANCIAL DICTIONARY. 381 

Net income. Income which remains after expenses and 
charges of all kinds have been deducted. 

Net price. The price after deduction of all discounts or 
allowances. 

Net profit. What is left after all expenses have been de- 
ducted. 

Net weight. The weight after allowance for or removal of 
extraneous matter, as the weight of material after its removal 
from the receptacle which contained it. 

New account. On the London Stock Exchange the new ac- 
count begins on the first day of the settlement. On this day 
dealings are either for money (immediate settlement)' or for 
the account, that is to say, for the next settlement. (See For 
the account). On other days for the new account means for 
the account following the current account. 

New Tennessee. An exclamation used by the brokers when 
a new member first appears on the New York Stock Exchange 
as a signal for his "initiation," which consists in hazing him. 
The exclamation also is used to direct attention to the presence 
of a stranger on the exchange. 

The term ''New Tennessee" originated in the refunding in 
1883 by the state of Tennessee of its old defaulted bonds. New 
bonds were given for the old ones, but for considerably less 
than the face value of the old bonds, and the rate of interest 
on the new bonds also was less than the rate on the old ones. 
The conditions of exchange of the old bonds for the new ones 
were unsatisfactory and "New Tennessee," the abbreviation 
for the new bonds of the state of Tennessee, became a term of 
derision. It soon became the practise to shout it out when a 
new member of the exchange made his first appearance on the 
floor or when a stranger eluded the vigilance of the door- 
keepers and wandered upon the floor. 

The corresponding expression on the London Stock Ex- 
change is fourteen hundred; see Fourteen hundred. 

New York Clearing House Association. The official title of 
the organization under which the associated banks of New 
York conduct daily clearings. 

The association was organized September 13, 1853, and 
clearings were begun on October 11 in the basement of No. 14 
Wall street. The first day's clearings amounted to $22,648,- 



382 SMITH'S FINANCIAL DICTIONARY. 

109.87 and the balances to $1,290,572.38. The number of banks 
making clearings was 52. The first manager was George D. 
Lyman, who had been a teller in the Bank of North America. 
The association now owns and makes its clearings (or ex- 
changes) in a handsome white marble building Nos. 79 to 83 
Cedar street. 

For an explanation of the method of making clearings (or 
exchanges) and settling balances see Clearing house of the 
associated banks of New York. 

New York Produce Exchange. The place in New York 
where dealings in grain, provisions, etc., are extensively con- 
ducted. 

New York Stock Exchange. The New York Stock Ex- 
cliange is an unincorporated, voluntary association and while 
it is not a corporation neither is it a partnership. It exists, 
however, under a written constitution and by-laws. Neither 
the constitution of the New York Stock Exchange nor the 
rules and regulations of the London Stock Exchange in ex- 
press terms state the object for which those bodies were or- 
ganized, but they are so manifest that a statement of them has 
not been deemed essential. 

The New York Stock Exchange had its origin in an agree- 
ment dated May 17, 1792, by ''Brokers for the Purchase and 
Sale of Public Stock." By public stock was meant government 
securities ; in other words, government bonds. At that time 
the brokers met and did business under a buttonwood tree that 
stood in front of the dividing line between the present Nos. 
68 and 70 Wall street. In 1817 a constitution was adopted 
under the name "New York Stock and Exchange Board." On 
January 29, 1863, the present name, "New York Stock Ex- 
change," was adopted. 

The membership of the New York Stock Exchange is limited 
to 1,100. The admission fee is $2,000, but this is in addition to 
the cost of a membership itself which depends on the "state of 
the market" for seats, as memberships are called. A member- 
ship is obtained by buying the seat of a retiring, deceased or 
expelled member. A member is elected for life or until he re- 
signs or is expelled. 

Expulsion from the exchange forfeits membership, but not 
the proceeds of it. Temporary insolvency involves suspension. 



SMITH'S FINANCIAL DICTIONARY. 383 

Permanent insolvency involves loss of membership and the 
proceeds of the membership are applied to the payment of the 
claims of creditors who are members of the exchange. If there 
is a surplus it goes to the member or to his assignee if he has 
been declared a bankrupt. 

When a member dies his seat may be disposed of by the com- 
mittee on admissions and the proceeds delivered to his execu- 
tor or the administrator of his estate. 

New York Stock Exchange clearing house. The place 
Vv^here the differences in the accounts of brokers on the New 
York Stock Exchange are settled. 

Before the establishment of the clearing house a broker 
who had made sales of stocks was obliged to send the stocks 
to the offices of the various purchasers and collect payment 
from them. At the same time brokers from whom he had 
bought stocks were obliged to send the stocks to his office and 
collect payment from him. A broker may have made sales to 
the amount of $500,000 and purchases to the amount of $475,- 
000. He was compelled to make collections and payments for 
the full amounts, whereas under a clearing house plan he might 
have settled all the transactions in one operation and by the 
payment of only the difference of $25,000. 

Now, a broker at the end of each day makes up a sheet called 
a clearing house sheet, containing his purchases and sales. On 
one side of the sheet (the left hand side) the broker puts down 
his purchases, each purchase having a line for itself. In each 
transaction the name of the broker from whom the purchase 
was made comes first and then in order follow the number of 
shares, the name of the stock, the price at which purchased, 
and finally, the amount in dollars of the purchase. This side of 
the sheet is headed "Received from," meaning that the broker 
has contracted to receive the stocks enumerated. 

The other side of the sheet (the right hand side) contains 
the list of stocks sold (made out in the same order as the list 
of stocks bought) and this side of the sheet is headed "De- 
livered to," meaning that -the broker has contracted to deliver 
the stocks enumerated. 

If his purchases amount in money to more than his sales he 
accompanies his sheet with a check drawn on his own bank 
and payable to the clearing house bank (a bank in which the 



384 SMITH'S FINANCIAL DICTIONARY. 

clearing house account is kept). If his sales amount in money 
to more than his purchases he accompanies his sheet with a 
draft on the clearing house bank, which is accepted by the 
manager of the clearing house (made collectable by the in- 
dorsement of the manager). This draft is returned to the 
broker and is deposited by him in his own bank for collection 
in. the ordinary course. 

If the broker has bought more of any particular stock than 
he has sold or sold more than he has bought there is a stock 
difference (as well as a money difference) to be settled, but the 
settlement of this stock difference is provided for when the 
sheet is made up. If, for instance, the broker has bought 200 
shares of a certain stock and has sold 100 shares he receives 
th" difference or balance of stock, which is 100 shares. Some 
other broker who sold 100 shares more of the stock in question 
than he bought is directed by the manager of the clearing house 
to deliver this extra 100 shares to the first broker. The first 
broker credits himself on his sheet with the amount in money 
of the stock at the settling price while the second broker 
charges himself with the amount of it on his sheet. 

The settling price is an arbitrary price fixed by the manager 
of the clearing house. Each day at the close of business the 
manager of the clearing house sends out through the ticker the 
settling prices for the various stocks for the use of brokers in 
making up their clearing house sheets. In their use in mak- 
ing up the sheets they are called making-up prices ; in their use 
in making settlements they are called settling prices. These 
settling prices are the even prices next nearest to the last 
prices of the day. Thus, if the last price of a stock was 99 3-4 
or loi 1-4 the settling price would be 100. 

The broker who bought 200 shares may have bought them at 
99 1-2 and the 100 which he sold may have been sold at 100 1-2. 
If the settling price was 100 he would put down the extra 100 
shares due him in the sold column at 100 the same as if he 
actually had sold the stock at 100. 

Then his account would figure out thus : Bought 200 at 
99 1-2, which equals $19,900; sold 100 at 100 1-2 and 100 at 100, 
which equals $20,050. The difference is $150, which the broker 
collects by draft on the clearing house. Had he not included 
the 100 shares at 100 he would have owed $8,850. To the 



SMITH'S FINANCIAL DICTIONARY. 385 

broker who delivers the 100 shares to him at 100 he gives a 
check for $10,000. 

This particular part of the operation (the delivery of the 
stock and collection for it) is wholly outside of the clearing 
house. Deducting from this $10,000 the $150 received in the 
clearing house settlement his net payment is $8,850, exactly 
what it would have been had he not included the lOO shares at 
100 in the clearing house sheet. 

No matter if a broker bought more stock than he sold or sold 
more than he bought or what the prices may be or how many 
stocks may be included in his sheet the system employed in 
clearing his sheet accomplishes its end. Inasmuch as the differ- 
ences both in cash and stocks are provided for in the clearing 
house sheet there is, when the general settlement is concluded, 
no balance left of either cash or stock. There was, of course, 
as much of each stock sold as was bought, because there was a 
seller as well as a buyer at the same price in each individual 
transaction, and, accordingly, there was as much receivable in 
the aggregate as there was payable. Both sides of every ac- 
count are bound to balance or equalize when the differences in 
stock and money are figured out and put down in the proper 
places. 

The broker who is short of stocks in his sheet (who sold 
more than he bought) must borrow the stocks that he is short 
of for the deliveries which he is directed by the manager of the 
clearing house to make. 

Not all the stocks that are dealt in on the New York Stock 
Exchange are cleared through the stock exchange clearing 
house. Only those on the clearing house list are cleared. The 
stocks on this list are the ones actively (largely) dealt in. If 
an inactive stock becomes active it is put on the list ; if an ac- 
tive stock becomes inactive it is taken off the list. 

Transactions in stocks not on the clearing house list are not 
reported to the clearing house at all. Settlements in these 
stocks are made between the brokers in the ordinary course of 
business. For another thing, only stocks bought and sold regu- 
lar way (in the regular way) and at 3 are cleared. 

Stocks bought and sold regular way are put on the clearing 
house sheet on the day they are bought and sold, but are de- 
liverable on the following day. Stocks bought and sold at 3 



386 SMITH'S FINANCIAL DICTIONARY. 

are not deliverable until the third day after they are sold and 
are not put on the clearing house sheet until the second day 
after they are bought or sold ; they are put on the clearing 
house sheet at the settling price on the second day. 

Stocks bought and sold for cash or on option are not 
cleared. Also, only stocks in lots of lOO shares or multiples of 
lOO are cleared ; fractional lots (lots of less than lOO shares) are 
excluded. 

In settling differences on contracts in grain, cotton, coffee, 
etc., a similar plan is pursued. 

NF. As printed on the tape by the stock ticker these letters 
mean non-fundable, as non-fundable bonds. 

N. G. These letters are sometimes used as an abbreviation 
for no good or not good. 

Ninety. A bill of exchange payable in 90 days is often called 
a ninety ; plural, nineties. 

No account. When a check is received by the bank upon 
w^hich it is drawn and the drawer (issuer) has no account with 
the bank the words "No account" are stamped or written on 
it and it is rejected. 

No funds. When a check is received by the bank upon 
which it is drawn and the drawer (issuer) has no funds to his 
credit with which to pay it the words *'No funds" are stamped 
or written on it and it is rejected. 

Nominal. Existing in name only. A nominal price is one 
named for convenience. It is an assumed price — a price as- 
sumed in the absence of an established or actual price. 

Nominal assets. This term includes all assets, but it refers 
particularly to those assets that are of doubtful or no value. 

Nominal damages. Damages adjudged in a trivial amount 
where a right has been invaded but no actual damage sus- 
tained. 

Nominal partner. A person who is held out as a partner 
but as a fact has no interest in the business. 

Nominal value. A value in name only; approximate value; 
estimated value. 

Non-assented stock or bonds. Stock or bonds which the 
owners refuse to deposit under an agreement by which their 
status will be changed. For additional information see Read- 
justment. 



SMITH'S FINANCIAL DICTIONARY. 387 

Non-assessable stock. A stock that cannot be assessed. 
Non-clearing house stocks. Stocks dealt in on the New York 
Stock Exchange which are not included in the list of stocks 

cleared at the stock exchange clearing house. 

Non-cumulative stock. Stock on which dividends if not 
paid do not accumulate — that is, if dividends are not paid for a 
period they have not subsequently to be paid for the period 
when they were not declared. 

Non-interest-bearing. Bearing or paying no interest. The 
money issued by the United States government, since the gov- 
ernment pays no interest on it, is a non-interest-bearing obliga- 
tion ; the bonds issued by the United States government, since 
the government pays interest on them, are interest-bearing 
obligfations. 

Non-member bank. A bank that is not a member of a clear- 
ing house but clears through a bank that is a member. 

Non-member bank statement. See Bank statement. 

Non-negotiable instrument. A non-negotiable instrument is 
one where the payee has the right to set off or present in par- 
tial or entire liquidation of it a claim against the original owner 
of it or where there is a stipulation that payment of it shall 
or may be made in a representative of money (as a bill of ex- 
change or draft or a check) or that payment shall or may be 
made in property. 

Also see Negotiable instrument. 

Non-value bill (of exchange). Same as accommodation bill 
(of exchange) ; a draft (bill of exchange) drawn against credit 
allowed to the drawer by the drawee (the one who pays the 
draft). 

Also see Value bill ( of exchange). 

No protest. A draft or a promissory note so marked is not 
to be protested, or in other words, is not to go to protest if 
not paid ; a draft or a promissory note so marked is not sub- 
ject to the protest fee charged by the bank or other agent 
entrusted with its collection. An indorsed draft or promissory 
note is sometimes marked "No protest" so that demand shall 
not be made upon the indorser for the payment of it. 

When a draft or a promissory note is received marked "No 
protest" and the instructions are to protest it if not paid the 
draft should be protested on the theory that to make a pro- 



388 SMITH'S FINANCIAL DICTIONARY. 

test when not necessary is a less serious mistake than to omit 
a protest when one is necessary. 

For additional information see Protest. 

Northwestern receipts. Receipts of wheat at Duluth and 
Minneapolis, the great market points for spring wheat raised in 
Minnesota, North Dakota and South Dakota. 

Not a delivery. Stocks or bonds are not a delivery (are not 
deliverable) in fulfilment of contracts entered into on the New 
York Stock Exchange when they do not meet all requirements 
of the exchange. See Rules for delivery. 

The rules of the New York Stock Exchange are generally 
observed in transactions in stocks and bonds that take place 
elsewhere than on the exchange. 

The term not a delivery is also used in dealings in grain, 
cotton, coffee, etc. 

Also see Delivery, A. 

Not a good delivery. This term is colloquially in common 
use, but the word good has been dropped from the New York 
Stock Exchange rules for delivery as superfluous. A thing, as 
a stock or a bond, either is not a delivery (is not deliverable) 
on a contract or is a delivery (is deliverable). For information 
see Not a delivery. 

Notary or notary public. An officer duly commissioned and 
holding a seal of office who is empowered by law to note pro- 
tests and certify the same; to take depositions, acknowledg- 
ment of deeds and other instruments and authenticate the same 
by his official certificate, signature and seal. 

The protest of a bill of exchange (draft) or of a promissory 
note under a notary's signature and seal is everywhere re- 
ceived as legally authenticated without other evidence of the 
notary's official character. 

Formerly this officer was called scrivener or one who at- 
tested declarations and made drafts of deeds, wills, etc. 

Note. The abbreviated name for a promissory note, for in- 
formation as to which see Promissory note. 

Note also is an abbreviation occasionally used for bank 
note, as a ten-dollar note or a five-pound note. 

To note a bill of exchange (or a promissory note) means to 
make a memorandum on it to the effect that it has been dis- 
honored ; for additional information see Noting a bill. 



SMITH'S FINANCIAL DICTIONARY. 389 

Note broker. One who effects the sale of promissory notes. 
A note broker is different from a money broker. The commis- 
sion of a note broker is generally 1-8 or 1-4 of i per cent of the 
amount of the note. This commission is paid by the one for 
whom the broker sells the paper. The buyer pays no com- 
mission. 

Note of hand. Same as promissory note; see Promissory 
note. 

Note teller. The note teller in a bank is sometimes called 
third teller ; his particular business is to attend to the collection 
of promissory notes and drafts. 

Notice of dishonor. Notice by the holder of negotiable paper 
to the drawer or indorser that it was not paid at maturity. 

Noting a bill. When a bill (draft or promissory note) has 
been presented for acceptance or payment and has been dis- 
honored a note to that effect is indorsed on the bill, after which 
it may be formally protested. 

When a bill has been noted the protest may (in New York 
state) be extended as of (back to) the day of noting. 

The protest should be commenced on the day on which ac- 
ceptance or payment is refused, but it may be drawn up and 
completed at any time before the commencement of suit or 
even before or during trial and be antedated accordingly. 

Not worth a Continental. This phrase had its origin in the 
great depreciation in Continental money in the closing years 
of the eighteenth century. 

NS. As printed on the tape by the stock ticker these letters 
mean new series, as bonds of a new series. 

Nude contract. A contract without a consideration. 



SMITH'S FINANCIAL DICTIONARY. 



o 



O. As printed on the tape by the stock ticker this letter 
means offered. An offer alone (without a bid) is preceded by 
an O and a dot, thus : RG. O. 75, meaning that Reading stock 
was offered at 75. A sale and an offer is printed thus : RG. 75, 
O. 75, meaning that Reading stock was sold at 75 and was 
afterward offered at 75 without a sale or bid. A bid and an 
offer are separated by @, thus: 75@i-2, meaning that 75 was 
bid for the stock and that it was offered at 75 1-2. (On some 
tickers three dots . . . are used in place of @). 

OB. As printed on the tape by the stock ticker these let- 
ters mean opening of books (see Books open) ; they mean that 
the stock so sold is to be delivered on the opening of the trans- 
fer books of the company which issued it. The delay in de- 
livery until that time is because the stock had been assigned 
to a specified individual by the original owner instead of hav- 
ing been assigned (or signed) in blank (see Assigned in 
blank) and, therefore, not being a delivery it was necessary to 
wait until a new certificate could be obtained before making 
delivery to the buyer. 

Also see At the opening. 

Obligation. Debt. 

Obligations. London Stock Exchange name for a certain 
class of bonds, principally of governments and railroads on the 
Continent of Europe. 

Obligatory bond. Any bond the interest on which is at a 
fixed rate payable at stated intervals. Failure to pay the in- 
terest on such a bond constitutes a default. 

Obligee. The person in whose favor a bond or other ob- 
ligation has been entered into. 

Obligor. The person who is bound, especially by bond, to 
perform an obligation. 

Obvious fraud. When a member of an exchange is expelled 
for fraud it is usually stated that he is expelled for obvious 
fraud, by which is meant that his guilt Avas clearly established. 



SMITH'S FINANCIAL DICTIONARY. 391 

Ocean room. Same as sea room ; freight accommodation on 
an ocean vessel. 

Odd lot. Same as fractional lot; in stocks less than 100 
shares and in bonds less than $10,000. 

Off coast. Said of a vessel arrived at port but waiting or- 
ders to discharge cargo or go to another port. 

Offer. The expression of a desire to buy or sell at a price 
named by the offerer. For additional information see Bid and 
asked. 

Offered down. Said when a stock is offered for sale at a 
price lower than the actual market price. 

Official bfoker. The one who is designated by the commit- 
tee for general purposes of the London Stock Exchange to 
make purchases and sales in settlement of disputed transac- 
tions and in defaults. 

Official list. See Stock Exchange Daily Official List. 

Officially quoted. Quoted in the official price list of the 
London Stock Exchange. 

Official minimum. A term applied to the minimum dis- 
count rate of the Bank of England. 

Official time of the New York Stock Exchange. At 14 
minutes after 2 p. m. on each business day except Saturday 
the words Hammond's time are printed on the tape by the 
stock ticker and afterwards the lever of the instrument sounds 
fifteen beats. When the fifteenth beat is sounded it is 2.15 
p. m., and the end of the time for the delivery of securities in 
settlement of contracts entered into on the New York Stock 
Exchange which mature on the current day. 

O. K. These letters when inscribed on a document signify 
that it is correct. 

Old demand notes. In the monthly statement of the public 
debt appears the item "Old demand notes." It refers to notes 
(money in the form of promissory notes) issued previous to 
the present United States notes (greenbacks). 

Old Lady of Threadneedle Street. A colloquial appellation 
for the Bank of England, the main entrance to which is on 
Threadneedle street (London). 

Omnium. A name, now obsolete, for certain British govern- 
ment loans issued towards the end of the eighteenth century; 
they were called omnium because each subscriber fbf £100 



39^ SMITH'S FINANCIAL DICTIONARY. 

stock received a parcel composed of several sorts of govern- 
ment loans. 

On account. A payment on account is a payment in par- 
tial liquidation of an obligation or debt. 

On a scale. A term used in speculative operations in stocks, 
meaning buying or selling, as the case may be, at stated inter- 
vals in prices as prices decline or advance. For instance, 
buying at lOO, 98, 96, 94 and 92 would be buying on a 2 per 
cent declining scale. Reversing the order of prices would be 
buying on an ascending scale. The operation of selling on a 
scale is conducted in the same fashion. 

Also see Pyramiding. 

On balance. Buying on balance is the buying in excess of 
previous sales. For instance, if an operator who has sold 
5,000 shares of stock turns about and buys 10,000 shares 5,000 
shares of the stock bought are bought on balance. Selling on 
balance is the selling in excess of previous purchases. 

On call. Deliverable on demand. For information as to 
money borrowed or loaned on call see Call loan. 

On canal. Said of grain in transit on the Erie canal ; such 
grain is included in the visible supply. 

On 'change. On a stock exchange or on any exchange. 

On consignment. Said of goods which are sent by one 
party (who is the consignor) to another party (who is the 
consignee) to be sold by the latter for the benefit of the for- 
mer. Property forwarded on consignment is paid for as sales 
of it are effected. 

One-name paper. Single-name paper; paper without in- 
dorsement. This term is seldom used ; the term almost in- 
variably used is single-name paper. 

On lake. This term is applied to grain in transit on the 
lakes ; such grain is included in the visible supply. 

On margin. When stocks are bought or are sold short on 
margin a percentage of the par (face) value, say 10 per cent, 
is deposited with the broker to secure him against possible 
loss. The amount deposited is margin. 

For information as to margin for speculative operations in 
stocks, bonds, grain, lard, pork, short ribs, cotton, coffee and 
silver bullion see Margin. 

On memorandum. In trade when an order is booked (re- 



SMITH'S FINANCIAL DICTIONARY. 393 

ceived and recorded) on memorandum it is meant that it is 
booked at a private price, as distinguished from an open or 
public price. For example, an open price may not yet have 
been made on goods to be brought out in the future, but an 
order for the goods may be accepted on memorandum — at a 
private price agreed upon between the seller and the buyer. 

On open account. For information see Open account. 

On order. Subject to order. 

Property (as grain) shipped, but with no consignee (re- 
ceiver) named, the property being deliverable on the order of 
the consignor (shipper) ; as a fact the property is deliverable 
to the holder of the bill of lading (the receipt for the property 
issued by the railroad or other transportation company). 

Shipments on order figure to a considerable extent in deal- 
ings in both domestic and foreign exchange. Illustration : 
A shipment of grain from Chicago to New York may be con- 
signed on order. A certain amount is advanced by a bank 
(or banker) on the bill of lading. When the grain is sold 
in New York the bank surrenders the bill of lading to the 
buyer of the grain, reimburses itself for its advance to the 
shipper and returns the balance to the shipper. 

Or, a shipment of grain may be made from New York to 
London. The process is the same as with the shipment of 
grain from Chicago to New York. 

Also see Sold on order ; also see To order. 

On passage. Grain or other commodities or merchandise 
on the high seas ; refers particularly to grain. 

On the inside. Possessing a knowledge of afifairs that are 
secret or that are know^n to very few. 

On track. A term applied to grain in cars ; such grain is 
not included in the visible supply for the reason that its loca- 
tion is not always known. 

Open account. Same as running account, although the 
term open account is usually employed. 

In trade (particularly the wholesale trade) when an open 
account is established the buyer arranges with the seller to 
receive credit for a certain period on purchases made. He 
does not give a promissory note or furnish security of any 
kind, but when the period of credit agreed upon has elapsed 
after a (after each) purchase he makes payment for it by check 



394 SMITH'S FINANCIAL DICTIONARY. 

or bill of exchange or in whatever way may have been pre- 
determined by the seller and buyer. If the period of credit is 
exceeded without payment by the buyer the seller is consid- 
ered to have or perhaps by stipulation has the right to draw 
on the buyer for the amount due. 

The name open account also is applied to an account in 
which some item is not settled between the parties. 

On the London Stock Exchange the term open account 
means the excess at the fortnightly settlement of the bull 
(long) interest over the bear (short) interest; or the reverse, 
the excess of the bear interest over the bull interest in the mar- 
ket as a whole or in a group of stocks or in a single stock, ac- 
cordingly as specified. It is an open bull account or an open 
bear account as designated. 

Open credit. A credit given to a customer at a bank against 
which he may draw without pledging security; or in trade a 
credit given to a customer against which he may order goods. 

Open market. The public market ; a market that is free to 
all, as distinguished from one participation in which is re- 
stricted to members of an exchange. 

Open market discount. This term is generally applied to 
the open market discount rate in a foreign financial centre. In 
London the bank rate is the rate of the Bank of England, 
whereas the open market rate is the rate of other banks and 
bankers and bill brokers (dealers in commercial and bank 
paper). In Paris the bank rate is the rate of the Bank of 
France, in Berlin the bank rate is the rate of the Imperial 
Bank of Germany, and so on. 

In New York the bank rate is the uniform rate of the banks 
as distinguished from the varying rates of other lenders. In 
London when the Bank of England makes a rate the other 
lenders adopt it, if possible, or sometimes even quote a higher 
one; but if they find they cannot do business at it they make 
a lower rate, and so it is in Paris, Berlin, etc. In New York 
if other lenders cannot do business at the rate adopted by the 
banks they make a lower one. 

Open market rate. As applied to money the open market 
rate is the rate other than the "bank rate." See Open market 
discount. 

Open order. One good until canceled or countermanded. 



SMITH'S FINANCIAL DICTIONARY. 295 

Open position. London Stock Exchange term for the 
amount of stock that has been bought for the rise or sold for 
the fall by speculators. For instance, if it is said that there is 
a large bull position open in consols or in the consol market 
it is meant that speculators have bought consols heavily in ex- 
pectation of a rise in their price. An open position is closed 
when the bull resells or the bear repurchases, thus liquidat- 
ing his commitments. 

Open price. A trade term; a public price as distinguished 
from a private price. 

Open trade. This term applies to a speculative trade or 
transaction that has not been closed. For instance, when a 
stock has been bought that is to be sold again it is an open 
trade or the trade is open until the stock actually is sold and 
the trade or transaction is thus completed or closed. It is the 
same if a stock is sold short ; it is an open trade until the stock 
is bought. The term also applies to trades in grain, cotton, 
coffee, etc. 

Operating company. In the case of a railroad this is the 
company which owns and actually operates the road, but 
which company itself is owned, or at least the control of which 
is owned, by another company; the latter company would be 
designated as a controlling company. 

Operating expenses. The expenses involved in the opera- 
tion of a company. 

Operator. In stocks a professional dealer; one who makes 
a business of speculation ; the term is generally construed as 
meaning a speculator on a large scale. 

O. p. money. A Wall Street colloquialism, meaning other 
people's money. The term is sometimes applied to money 
that has been borrowed or to money offering in the money 
market — that is, money which may be borrowed. 

Option. Property bought or sold to be received or delivered 
by the buyer or seller in accordance with the terms agreed 
upon. Sometimes the buyer pays for the privilege of calling 
for the delivery of the property within a certain time if he so 
wills, but he is not obliged to take it ; sometimes the seller 
pays for the privilege of delivering the property. 

In speculation an option is the purchased privilege of either 
receiving or delivering a specified amount of anything (as 



396 SMITH'S FINANCIAL DICTIONARY. 

stocks, grain, cotton, coffee, etc.) at a specified price within a 
specified time. 

In stocks bought on buyer's option the buyer may, when the 
option is for four days or more, demand deHvery of the stock 
on any day within the time specified on one day's notice to the 
seller. In stocks sold on seller's option, when the option is 
for four days or more, the seller may deliver the stock to the 
buyer on any day within the time specified on one day's notice 
to the buyer. 

When a dividend becomes due on a stock during the 
pendency of an option on it the dividend is collected by the 
seller of the stock, who holds it, allows interest on it and pays 
the dividend, with the interest on it, to the buyer on the settle- 
ment of the contract. When an option on a stock matures 
during the closing of transfer books the seller of the stock 
gives to the buyer of the stock a due bill for the amount of the 
dividend which is payable when the dividend is paid, but the 
due bill does not bear interest. 

Also see Privilege. 

Optional bond. A bond maturing (expiring) at a specified 
date, but which may be redeemed (paid and canceled) after 
a designated earlier date at the pleasure (option) of the com- 
pany (or government) issuing it. Thus, a bond maturing in 
fifty years, but which may be redeemed after ten years, is an 
optional bond. 

Option money. The amount paid to obtain an option ; see 
Option. 

Order. A written instrument drawn by one person and 
addressed to another which directs the payment of money, the 
rendering of a service or the delivery of something to the 
bearer of the writing. 

The commonest forms of orders for the payment of money 
are checks and drafts (bills of exchange). Postoffice money 
orders and the money orders issued by express companies are 
drafts. 

When a speculator directs a broker to make a purchase or 
sale he is said to have given an order and when the broker 
has made the purchase or sale he is said to have executed the 
order. 

Names of orders employed in speculative operations are 



SMITH'S FINANCIAL DICTIONARY. $97 

buying order (an order directing a purchase), selling order 
(an order directing a sale), stop order (an order fixing a point 
or price at which a sale or purchase is to be made, usually to 
avoid loss, and when given for this purpose it is called a stop- 
loss order) and cancel order (an order canceling a previous 
order). 

Also see On order; also see To order. 

Ordinary general meeting. English term for a meeting of 
the shareholders (stockholders) of a company at which the 
directors propose a dividend, which cannot be paid without 
the approval of the shareholders ; also at this meeting the 
directors present for adoption their report and accounts, which 
must have been issued to shareholders beforehand ; also at this 
meeting the places of directors, who retire by rotation are 
filled, and the auditors, who retire as a matter of course, are 
reelected or replaced. 
. Ordinary stock. Common or general stock . 

In Great Britain when an ordinary (common) stock has 
been divided into two parts one part, called deferred, receives 
no d-vidend until the other part, called preferred, has received 
a dividend at a fixed rate. The deferred stock is called A 
stock and the preferred stock is called B stock. 

This B or preferred stock is not the same as preferred stock 
in the United States. What in the United States is called pre- 
ferred stock is in Great Britain called preference stock and 
preference stock in Great Britain may be divided into two 
or more classes called first preference, second preference, etc., 
just as preferred stock in the United States may be divided 
into two or more classes called first preferred, second pre- 
ferred, etc. When, however, there is but one class of pref- 
erence stock ahead of an ordinary stock in Great Britain the 
B or preferred stock is equivalent to second preferred stock 
in the United States. 

O. T. On track ; a term applied to grain in cars ; such 
grain is not included in the visible supply for the reason that 
its location is not always known. 

Other people's money. The term is usually abbreviated to 
O. p. money ; it is a term sometimes applied to money that 
has been borrowed or to money offering in the market — that 
is, money which may be borrowed. 



39^ SMITH'S FINANCIAL DICTIONARY. 

Outclearer. The name given to the clerk in a bank in Great 
Britain who arranges, makes a record of and takes to the 
clearing house items (checks, drafts, etc.) for collection from 
other banks. The corresponding clerk in a bank in New York 
is called settling clerk. 

Also see Inclearer. 

Outcrop. A name applied to a mine that is worked near the 
surface. A mine whose workings or levels are deep down in 
the earth is known as a deep level. 

Outlawed. An outlawed account or claim is one upon 
which suit is barred by the statute of limitations ; it is an ac- 
count or claim which the creditor has so long delayed in en- 
forcing that the courts, acting under the statute, decline to 
assist him in collecting it. In an ordinary contract, obligation 
, or liability in New York state suit must be brought within six 
years from the last payment upon it of principal or interest 
or within six years from the last date upon which the debtor 
acknowledged his liability. 

Out o£ condition. When grain is injured so that its grade is 
lowered it is out of condition. 

Out-of-town check. A check on a bank which is located 
outside the territory of the clearing house with which the 
collecting bank is identified. In this case the payment of the 
check is accomplished by special collection. 

Outside bank. One that is not a member of a clearing house 
and does not clear through a bank that is a member. Also see 
Non-member bank. 

Outside broker. A broker who is not a member of an ex- 
change ; one who deals in securities that are not dealt in on 
a stock exchange. A dealer in the outside market or on the 
curb is an outside broker. In New York such a broker is not 
a bucket shop keeper; see Bucket shop. 

In London an outside broker is one who is not a member 
of the London Stock Exchange and is sometimes described 
as a bucket shop keeper. Some outside brokers, however, con- 
duct a perfectly legitimate business. 

Outside market. The name that is applied in New York to 
the market for securities not dealt in on the New York Stock 
Exchange. The curb market or street market is called the 
outside market, but securities dealt in in offices or anywhere 



SMITH'S FINANCIAL DICTIONARY. 399 

else outside the New York Stock Exchange are classed as 
in the outside market. 

Outside securities as a rule cannot be bought on margin. 
They have to be paid for outright. This is because of the 
difficulty which might be entailed in enforcing contracts in 
these securities ; contracts in securities dealt in on the New 
York Stock Exchange are easily enforced under the rules of 
the exchange. The brokers in outside securities have no for- 
mal organization or rules, although in practise they follow the 
rules of the New York Stock Exchange. 

Outside securities are not sold short to any extent owing to 
the uncertainty as to the ability to borrow them. In other 
words, the dealings are chiefly in the actual securities in sell- 
ing as well as in buying. 

The term outside market as applied to money in London 
means the money market aside from the Bank of England; it 
means the same as open market ; see Open market discount. 

Outsiders. In Wall Street this term means others than 
professional or regular speculators ; the general public. 

Outside securities. Those not dealt in on the New York 
Stock Exchange. Though the securities may not be dealt in 
at the place of assembly of the outside brokers but only in 
offices they still are outside securities. For additional infor- 
mation see Outside market. 

Outward trade. Another name for export trade ; goods and 
other articles of commerce sold and shipped to other countries. 

Over. In London over a figure or fraction means 1-32 
above. Over 3-16 means 7-32. 

Overbought. Said when the long interest in the stock 
market is unwieldy. When an individual has bought more 
than he can provide margin for in a decline he has overbought. 

Overcapitalized. When a company is unable to earn profits 
amounting to a fair return on its capital it is said to be over- 
capitalized. 

Overcertification. When a bank certifies a check (see 
Certified check) and the drawer (issuer) has not at the time 
enough funds on hand to meet it that is overcertification. 
The bank expects the drawer to make up the deficiency by a 
deposit before the check is presented for payment. 

Overcertification is common and frequently is necessary in 



ioo SMITH'S FINANCIAL DICTIONARY. 

Wall Street. If stock for a large amount is purchased the 
buyer may not have on deposit sufficient funds with which to 
pay for it. The purchaser issues his check, which is certified 
by the bank on which it is drawn. Then he obtains a loan 
from the bank, which is secured by pledging the stock pur- 
chased. The amount of the loan is placed to the credit of the 
owner of the stock and thus his overdrawn account is made 
good. 

Overcertification is prohibited by the National bank act 
and renders officers or clerks liable to a fine of not more than 
$5,000 or imprisonment for not more than five years or both; 
it also gives the Comptroller of the Currency power to appoint 
a receiver. In the National bank act overcertification is called 
false certification. 

Overdraft. When a check is drawn on a bank and there 
are not sufficient funds to the credit of the drawer (issuer) in 
the bank to meet it the check is an overdraft — the drawer of 
the check has overdrawn his account. In overcertification the 
check that is certified is technically an overdraft. 

Overend Friday. A name given to one of the two Black 
Fridays in the financial history of England; the day (Friday, 
May II, 1866) on which occurred a panic as a result of the 
failure of the great discount house of Overend, Gurney & Co. 
For additional information see Black Friday. 

Overhead price. Same as all-'round price ; a price which 
covers cost and all charges, including what usually are extra 
charges. 

Overissue. When more stock has been issued than the 
charter of the company authorizes ; criminal. 

Overlying bond. A bond issued under a mortgage posterior 
and subsequent in claim to another mortgage. 

Overlying mortgage. A mortgage posterior and subsequent 
in claim to another mortgage ; for instance, when speaking of 
a first mortgage a second mortgage is an overlying mortgage. 

Over-night. An over-night transaction is one lasting for 
or to be concluded in 24 hours — that is, lasting until or to be 
concluded on the business day next following that on which 
thv-. transaction was entered into. 

Over-night loan. A loan continuing only for 24 hours or 



SMITH'S FINANCIAL DICTIONARY. 401 

until the business day next following that on which it is 
effected. 

Overplus. Same as surplus ; residue ; remainder. 

Over-sea trade. Trade with a country which is beyond an 
mtervening sea. 

Oversold. Said when the short interest in the stock market 
is excessive; also said when an individual has sold more than 
he can provide margin for in case of an advance. 

Oversold account. London Stock Exchange term ; said 
when bear (short) sales of securities for the account (see Ac- 
count, The) are excessive. 

Overstayed. When a speculator has failed to close his 
transaction until part of his profit has vanished he has over- 
stayed — overstayed his market. 

Over the counter. Said of business done in an office instead 
of at an exchange. 

In transactions in (foreign) exchange the over-the-counter 
or counter rate is the rate which the dealer in exchange pays. 
for a bill. 



Pacific or transcontinental railroads. Atchison, Topeka & 
Santa Fe ; Canadian Pacific, Great Northern, Northern Pacific, 
Southern Pacific, and Union Pacific. 

Paid-up stock. That which the subscribers (persons who 
have subscribed for it) have paid for in full. 

Panic. In Wall Street a panic is a time of great alarm when 
there is a rush to sell securities with a ruthless sacrifice of 
values. 

Also see Black Friday; also see Grant & Ward panic; also 
see Jay Cooke panic. 

Paper. Usually refers to commercial paper. Collectively, 
promissory notes and bills of exchange (drafts) are paper ; 
specificially, a single promissory note or a single bill of ex- 
change is a piece of paper. 



402 SMITH'S FINANCIAL DICTIONARY. 

Paper basis. Exists when values are based on paper money. 
The value of paper money depends on the credit of the gov- 
ernment issuing it. 

Paper money. Paper money, as a rule, is intended for cir- 
culation solely in the country in which it is issued. 

In countries where paper money is not backed by gold or 
silver, or is backed only by silver, or by only a small per- 
centage of gold, paper money is depreciated, or in other 
words, is at a discount. If lOO gold dollars cost 200 paper 
dollars gold money is at a premium of 100 per cent and paper 
money is at a discount of 50 per cent ; again, if 100 silver 
dollars cost 150 paper dollars silver money is at a premium of 
50 per cent and paper money is at a discount of 33 1-3 per cent. 

Paper profits. Profits in transactions not yet closed and 
consequently not yet in hand. 

Par. The face value. 

On the New York Stock Exchange if the face value of a 
stock is $100 it is at par when it is selling at 100. It is above 
par when it is selling at a higher price, as loi ; it is below par 
when it is selling at a lower price, as 99. Half-stock (stock 
of the face value of $50) also is at par when it is quoted at 100, 
which in this case means $50. The face value of a stock is 
divided into 100 parts for quotation purposes, no matter what 
the face value may be, and each part is called i per cent or i 
point (or a point). Therefore, when a half-stock is quoted at 
loi it is I above par, which means that the stock is worth 
$50.50 a share ; when it is quoted at 99 it is i below par, which 
means that the stock is worth $49.50 a share. The same 
principle applies to quarter-stock (stock of the face value of 
$25) and, in brief, to stock of any face value. 

In some markets stocks are quoted in dollars instead of by 
percentage. Thus, in such markets if a stock of the face value 
of $100 is selling at 100 it is at par; if selling at loi it is i 
above par ; if selling at 99 it is i below par. Likewise, if a 
stock of the face value of $50 is selling at 50 it is at par ; if sell- 
ing at 51 it is I above par; if selling at 49 it is i below par. 
So, also, if a stock of the face value of $25 is selling at 25 it is 
at par ; if selling at 26 it is i above par ; if selling at 24 it is 
I below par ; and so on. 



SMITH'S FINANCIAL DICTIONARY. 403 

Parent company. One from which other companies derive 
authority. A company owning a patent may grant to other 
companies the right to use the patent. The parent company 
generally owns a controlling interest in a company which op- 
erates under authority from it, but this is not necessarily the 
case. 

Paris Bourse. The official name is ''The Company of the 
Paris Bank, Exchange, Trade, and Finance Brokers". The 
governing body of the bourse is the chambre syndicale. A 
membership in the bourse can only be secured by purchase 
(as in the New York Stock Exchange) and then the candidate 
for membership must secure the approval of the Minister of 
Finance before he can present his name for election, and the 
election is by vote of the members as a whole and not by a 
committee. A member is elected for life as in the New York 
Stock Exchange. 

A membership in the Paris Bourse may be owned by 
twelve persons, but it must be in the name and control 
of some one of the owners, who alone has the right to do 
business in the bourse and must own outright at least one- 
fourth of the membership. 

The small enclosure in the Paris Bourse set apart for the use 
of the seventy official brokers or agents de change is desig- 
nated as the parquet ; also the agents themselves as a body 
are designated as the parquet to distinguish them from the 
coulisse or body of outside brokers, these outside brokers as 
individuals being termed coulissiers. 

Parity. This word when applied to the price of a stock 
means a price which is equivalent or equal to the price for 
the same stock when it is quoted on a different basis. The 
price in London of an American stock is at parity with the 
price in New York when the stock is selling in London at a 
price which, allowing for the difference in method of quoting, 
is equivalent or equal to the price at which it is selling in 
New York. 

In dealings in American stocks on the London Stock Ex- 
change 4 shillings is counted as $1. Four shillings being 
equal to 97 1-3 cents the price of an American stock must be 
2 2-3 per cent (quotably 2 5-8 per cent) higher in London 
than in New York if the London price is to be equivalent to 



404 SMITH'S FINANCIAL DICTIONARY. 

(or at a parity with) the New York price. Not 2 5-8 per cent is 
to be added arbitrarily to the New York price, but 2 5-8 per 
cent of the New York price, whatever it may be, is to be add- 
ed to the New York price to make an equivalent London price. 

Thus, for a stock selling at 50 in New York the equivalent 
price in London would be 51 3-8 (while the fraction 3-8 is not 
strictly correct it is quotably correct). For a stock selling 
at 100 in New York the equivalent price in London would be 
102 5-8. Conversely, for a stock selling at 100 in London the 
equivalent price in New York would be 97 3-8 and for a stock 
selling at 50 in London the equivalent price in New York 
would be 48 5-8. 

In grain there is a normal difference in price between two 
markets equal to the cost of transporting the grain from the 
market where the lower price prevails to the market where 
the higher price prevails. When the difference is normal 
prices are at parity. It is the same in cotton, etc. 

Par of exchange. The par of foreign exchange is the fixed in- 
trmsic value of the currency unit (monetary unit) of one coun- 
try expressed in the terms of the currency of another country 
which uses the same metal as a standard of value. Thus, $1 
in United States gold money is 4. 11 shillings or 4 shillings 
1.31 pence in English gold money or 5 francs 18.26 centimes in 
French gold money or 4 reichsmarks (marks) 19.79 pfennigs 
in German gold money or 2 guilders (florins) 48.78 cents in 
Netherlands (Holland) gold money, and so on. 

If the price paid for a bill of exchange just equals the 
amount forwhich it is drawn then exchange is at par; if more is 
paid exchange is above par; if less is paid exchange is below 
par. 

Between a gold standard country and a silver standard 
country there can exist no fixed par of exchange for the rea- 
son that silver, unlike gold, has not a fixed value ; in other 
words, silver being a commodity its value depends on the state 
of the market for it. 

Parquet. See Paris Bourse. 

Participating bond. Comparable to an income bond inas- 
much as the return to the holder in interest depends on the 
extent of the revenues so applicable. 

The first bonds to bear this name were issued in 1902 and 



SMITH'S FINANCIAL DICTIONARY. 405 

•*yere designated "4 per cent and participating bonds." These 
bonds were in effect collateral as well as income bonds. The 
company which issued the bonds owned stock in another com- 
pany and this stock was deposited and pledged as security for 
the principal of the bonds. Interest at 4 per cent was guar- 
anteed by the company which issued the bonds and the bonds 
were also entitled to receive interest in excess of 4 per cent 
as permitted by the dividends paid on the stock securing the 
bonds beyond the amount necessary first to provide for the 4 
per cent as guaranteed. 

Partnership. Joint interest, with an agreement to share 
the profit and bear the loss in certain proportions. 

If one of two partners contributes the greater part or the 
whole of the capital he is not entitled to interest on his cap- 
ital or on the excess unless there is an express agreement al- 
lowing him interest. In the absence of an agreement it is as- 
sumed that the other partner's contribution of time or skill or 
both was regarded in the understanding between the part- 
ners as equalizing the disproportion of capital. If there is 
to be any compensation outside of a division of the profits it 
must be provided for in the partnership agreement. 

If the capital of a firm is impaired or wholly lost the deficit 
must be repaid like a loss of any other kind. There is no dis- 
tinction between an impairment of capital and any other loss 
and the agreement for sharing losses applies and obtains. A 
loss is equally a loss whether it is a loss of capital or of gains 
previously made. 

A partnership is not liable for a private debt of any of its 
members, but any member's interest in the property of the 
firm may be levied upon. The usual procedure is to sue the 
mdividual debtor and secure judgment against him ; execu- 
tion is then levied upon his individual property and If this is 
not sufficient to satisfy the judgment his interest in the part- 
nership property may be levied upon and sold. 

The individual insolvency of a partner when determined by 
bankruptcy proceedings or acknowledged by an assignment 
for the benefit of his creditors effects an immediate dissolu- 
tion of the firm. A partner may be actually insolvent, that is, 
unable to pay his debts, and the firm still may continue. But 
if he makes an assignment for the benefit of his creditors or if 



4o6 SMITH'S FINANCIAL DICTIONARY. 

his bankruptcy is decreed the immediate dissolution of the firm 
becomes necessary in order that the share in it of the insolvent 
may be ascertained and separated from the shares of the others 
and placed at the disposition of his creditors. 

If a partnership is continued beyond the time originally 
fixed and no new terms are agreed upon it becomes a con- 
tinued partnership. Any partner may then declare the firm 
dissolved whenever he chooses. The continued partnership, 
however, is presumed to be upon the same terms and condi- 
tions, so far as these are applicable, as those which obtained 
before the expiration of the fixed term. A clause requiring a 
partner who wishes to retire to notify the others at some def- 
inite time beforehand is no longer in force, because such an 
arrangement is incompatible with a partnership at will. 

When one of two partners dies the partnership is imme- 
diately dissolved unless there is a provision in the partnership 
agreement to the contrary. 

Part-paid stock. That which subscribers (persons who 
subscribe for the stock) have paid for only in part. 

Passenger density. A term used in railroad accounting, 
meaning the result obtained when the total number of miles all 
passengers were carried is divided by the number of miles of 
road operated. 

Passenger-mile cost. A railroad term, meaning the average 
cost per mile of carrying each passenger. 

Passenger miles. A railroad term ; the number of miles, 
collectively, traveled by all passengers. The result attained 
by adding together the number of miles traveled by all pas- 
sengers and dividing by the number of passengers shows the 
average number of miles traveled by each passenger. Pas- 
senger mileage means the same as passenger miles. 

Passenger traffic. Passengers transported by a railroad or 
other carrying line. 

Passing a dividend. Failure to declare a dividend that had 
previously been regularly paid. When the directors vote not 
to pay a dividend that previously had been regularly declared 
the dividend is stopped ; when the dividend simply is not de- 
clared it is passed. 

Passing a nsmie. London Stock Exchange term ; consists in 
the passing by the buying broker to the seller of the name of 



SMITH'S FINANCIAL DICTIONARY. 407 

the actual buyer for the purpose of preparing the transfer deed, 
so-called. If the jobber who sold to the broker is not (he gen- 
erally is not) the real deliverer he passes the name on to his 
seller (the one who sells to him), and so on until the name 
reaches the broker or jobber who sold real stock and is pre- 
pared to deliver it. See Name day. 

Passive bond. A bond not bearing interest but entitling 
the holder to some benefit. An income bond is a passive bond. 

Pawned stock. London Stock Exchange term for stock 
pledged as collateral. 

Pay. Remuneration ; recompense. The term also applies 
to the reputation of a person for keeping his financial engage- 
ments, as he is good pay or bad pay, sure pay or slow pay, 
etc. 

Payable in exchange. See In exchange. 

Pay day. Same as account day or settlement day; the 
fourth and last day of the fortnightly settlement on the Lon- 
don Stock Exchange, when securities are delivered to the buy- 
er and paid for, or when, if they are neither taken up (paid for 
in full) nor delivered but are carried over to the next settle- 
ment, the differences on them necessary to balance the ac- 
count are either paid or received, as the case may be. For ad- 
ditional information see Settlement, The. 

On the New York Stock Exchange there is a settlement 
every day except Saturday. 

Payee. The one to whom a check, bill of exchange or 
draft, promissory note or any order for money is payable. 

Payer. The one who pays, as the one who pays a bill of 
exchange or draft or a promissory note. 

Paying a dividend. For information see Dividend. 

Paying-in slip. Same as credit slip ; English name for the 
printed form upon which a depositor in a bank enters the 
amounts of checks, money, etc., to be placed to his credit in 
the bank. 

Paying teller. The clerk in a bank who pays out money 
and the custodian of the bank's cash ; often called first teller. 

Payment bill. The abbreviated name for a bill for pay- 
ment ; see Bill for payment. 

Payment for honor. Payment by a party other than the 
drawee (the one drawn upon) of a bill of exchange (draft) 



4o8 SMITH'S FINANCIAL DICTIONARY. 

which has not been honored by the drawee. The purpose is 
to save the honor (credit) of the drawer, who is looked to to 
protect or reimburse the one who makes the payment. 

Payment stopped. When a check has been lost or stolen 
the bank upon which it is drawn is notified to stop payment on 
it if it is presented. 

Payment supra protest. Payment, after protest, by a party 
other than the drawee (the one drawn upon) of a bill of ex- 
change (draft) which has not been honored by the drawe?^. 
The purpose is to save the honor (credit) of the drawer, who 
is looked to to protect or reimburse the one who makes the 
payment. 

Pegged. A Wall Street colloquial term used when a stock 
is held at or very near one price ; when the price of a stock is 
kept stationary. 

Penal sum. The sum stipulated in a bond to be paid by the 
obligor (the one bound to perform the obligation) in case he 
fails to fulfil its conditions. 

Penalty. A sum of money stipulated to be forfeited and 
paid in case of the non-performance of the conditions of a 
contract. 

Penny. A bronze coin of Great Britain equal to about 2 
cents. The name penny is also applied colloquially to the 
United States cent. 

Per. By or per annum (by the year or annually) ; per 
cent (by or in the hundred). When one person writes the 
name of another person followed by the word per and his own 
name per means by the writer for or in behalf of the person 
whose name is first inscribed. 

Also see Per procuration. 

Percentage. Rate per hundred or proportion in a hundred 
parts. Thus, i per cent is i on (or in) 100. For instance, a 
dividend of i per cent means $1 on each $100 of stock. In- 
terest at 5 per cent means $5 on each $100 of the whole 
amount, which is $50 on a bond for $1,000. A premium of 3 
per cent is $3 on each $100. 

In Great Britain prices, dividends and interest are expressed 
in percentages when stocks and bonds are spoken of, but when 
shares are mentioned it is more usual to quote in fractions of 
£t or in shillings and pence. Thus, the price of Brighton 



SMITH'S FINANlIAL DICTIONARY. 409 

Railway deferred stock is £138 1-4 per cent and its dividend is 
6 1-2 per cent; but the price of British Electric shares is £14 
1-8 and the dividend is 18 shillings per share. Premiums fol- 
low the same rule, being quoted in percentage on stocks and in 
fractions of a pound or in shillings and pence on shares. 

In insurance in Great Britain the premium is the considera- 
tion paid annually or periodically in return for which the 
company agrees to pay a sum at the death of the insured or 
on his arrival at a certain age. It is calculated in pounds, 
shillings and pence on each £100 of the amount of the insur- 
ance. Thus, a premium of 20 shillings per cent means that 
20 shillings is the annual premium on each £100 insured. 

Per contra. On the other side; used in bookkeeping. 

Permanent power of attorney. Written authority to act 
for another until revoked. 

Per mille. Per thousand. A premium or charge of i per 
mille is i on 1,000, which is equal to i-io of i per cent. For 
instance, if the Bank of France charges a premium of i per 
mille for gold the premium is i franc on every 1,000 francs of 
gold. 

Per procuration. Means by power of attorney. A person 
who signs in the name of another in transacting the business 
of the latter signs per procuration. If John Jones signs per 
procuration for Richard Smith he signs ''P. p. Richard Smith'' 
and then underneath "John Jones." 

Personal property. A movable article of property; chattel. 

A contract relating to personal property is governed by the 
laws of the state in which it is made. 

Personal security. Any security that is not real estate 
offered as a pledge for the payment of debt. 

Petit Bourse. This is an outside market for securities in 
Paris held in the evening. 

Patties. Used in invoices and accounts ; means sundry 
items of charge or expense too small to be enumerated sepa- 
rately. 

Petty cash book. A book, used in bookkeeping, in which 
are entered small payments so that they may be posted in a 
lump sum instead of separately. 

Physical condition. The condition or state of a property; 
in the case of a railroad the condition or state of the structure 



410 SMITH'S FINANCIAL DICTIONARY. 

(roadbed and buildings) and equipment (locomotives, cars 
and other apparatus for handling traffic and machinery in 
shops). 

Piece-of-eight. The old Spanish peso of Mexico is some- 
times called the piece of eight reals (real being derived from 
rey, a king). 

Piece of paper. A term applied to a promissory note or 
bill of exchange (draft). 

Piker. A Wall Street colloquialism, meaning a trader in 
small lots of stocks. 

Piking. A Wall Street colloquialism, meaning trading in 
small lots of stocks. 

Pinched out. London Stock Exchange term for a mining 
reef (lode or deposit of metal) that has disappeared or been 
worked out. 

Pinholed. When a stock certificate is punctured with 
numerous pinholes they furnish evidence that the certificate 
has had numerous sale tickets (memoranda of sale) pinned 
to it — that it has changed hands numerous times. 

When stock certificates bearing date materially earlier than 
that on which purchasers receive them are appearing in large 
numbers without pinholes it is taken as evidence of the un- 
loading of permanent holdings. Were the stock numerously 
pinholed the inference would be that it was floating stock — 
stock in regular use in speculative operations. 

Pistole. A former gold coin of Spain worth one-fourth 
doubloon, equal to $3.93.47. 

Pit trader. A name applied to a grain broker who trades 
(speculates) for his own profit or loss on an exchange or 
board. 

The particular place on the floor of the exchange or board 
where trading in grain is conducted is called the pit ; it is gen- 
erally circular in shape with steps leading down from an 
outside raised platform to the clear space on the floor where 
the traders stand. 

Placing a stock or placing bonds. Same as floating a stock 
or floating bonds ; marketing ; selling. The term is generally 
applied to the aisposal of an entire issue of stock or bonds, or 
at least a large part of an issue. 

Plain bond. A bond not secured by mortgage or collateral 



SMITH'S FINANCIAL DICTIONARY. 411 

and without a sinking fund provision. A debenture bond 
being (as a rule) merely a promissory note in the form of a 
bond is a plain bond. 

Plant. The permanent income-producing equipment of a 
company. For instance, the plant of a manufacturing com- 
pany consists of its works, usually including the land upon 
which they stand. The plant of a telegraph or telephone com- 
pany consists of its wires, instruments, etc. The plant of a 
gas company consists of its generating houses, tanks, mains 
and meters. 

Pledge. To pledge is to hypothecate or pawn ; to place (as 
stocks or bonds) in the hands of another as security for a debt. 
The property so placed or hypothecated is a pledge. 

Pledgee. The one to whom anything is pledged ; specific- 
ally, the one to whom personal property is pledged as security 
for a debt. 

Pledger. One who gives a pledge ; who hypothecates per- 
sonal property as security for a debt. 

Plunger. A Wall Street colloquialism, meaning a specula- 
tor who trades heavily and takes great chances. 

Point. In stocks a point is i per cent; in cotton and coffee 
one-hundredth of a cent. 

Also, as a Wall Street colloquialism, a point is advance in- 
formation or a suggestion of supposed value ; same as tip, 
which is another colloquialism. 

Pointer. A Wall Street colloquial appellation for one who 
imparts points ; see Point. 

Pony. English colloquialism for £25. 

Pool. This term applies when interests join together for 
mutual advantage. 

The anthracite coal pool, as it formerly existed, was an 
agreement whereby each company belonging to the pool was 
to mine a certain percentage of the total production. The 
production for each month was determined in the preceding 
month. The purpose of the pool was regulation of both out- 
put and prices. By restricting the output to the consumptive 
demand control of prices was accomplished. A schedule of 
prices was prepared for each month and all the companies 
made sales of coal in accordance with it. The anthracite coal 
pool was declared illegal by the courts on the ground that it 
was in restraint of trade. 



412 SMITH'S FINANCIAL DICTIONARY. 

In manufacturing pools are often formed. Formerly the 
manufacturers of steel rails joined in a pool. The pool fixed 
prices and each concern was allowed to make and sell a cer- 
tain percentage of the total output of rails. 

A freight pool formerly was an arrangement whereby rail- 
roads (or other transportation lines) divided among them- 
selves the tonnage for which they were all competing. For 
instance, the business between New York and Chicago for- 
merly was divided among the roads handling it. Each road 
was allowed a certain percentage of the whole. When a road 
was ahead of its percentage (had carried more than its percent- 
age) it had to even up (this being the term used) by trans- 
ferring freight received by it to roads which were behind 
their percentage. This was called a tonnage pool. At one time 
a money pool was in existence. In this pool a road that had 
carried more than its percentage had to pay over in money the 
amount received for carrying the freight in excess of its per- 
centage. This money went to roads which carried less than 
their percentages. A passenger pool was based on the same 
general principles as a freight pool. To secure a distribution 
of business in accordance with the percentages allotted differ- 
ential rates (lower rates) were permitted to be charged by 
roads not advantageously situated or not having as attractive 
a service as other roads. Also, where it was possible, traffic 
was diverted from lines ahead of their percentages to lines 
behind their percentages in order to even up. A money 
pool in the passenger business operated in the same way as a 
money pool in the freight business. 

Pools, for the most part, have been terminated by the In- 
terstate commerce law and by the national anti-trust law 
and the anti-trust laws of the various states. 

Also, the term pool is applied to a fund contributed by sev- 
eral persons for the purpose of undertaking a speculation. 
When a pool is formed in a stock in order to manipulate the 
stock the contributors to the pool (mutual fund) appoint a 
manager of it who conducts the operations in the stock. If it 
is a bull pool the first step is to buy as much stock as is desired 
at as low prices as possible and then by means of wash trans- 
actions (see Washing) in the stock advance the price to a 
point where the stock actually held can be sold at a satisfactory 



SMITH'S FINANCIAL DICTIONARY. 413 

profit. If it is a bear pool the first step is to sell short (sell 
stock not owned) to the extent desired at as high prices as 
possible and then by means of wash transactions in the stock 
depress the price to a point where the stock actually sold short 
can be bought back at a satisfactory profit. 

Stock holdings are sometimes pooled (or put in a pool) to 
obtain control or tie up control of a company. 

Poor debtor. An insolvent debtor. 

Port of entry. A port on navigable water where is located 
a custom house for the entry of vessels and the receipt 
of duties collectable on goods brought from foreign countries. 

Position. In dealing in futures (contracts maturing in the 
future) in grain, cotton, coffee, etc., it is the practise 
to designate the contracts by the names of the months 
in which they mature. Thus, wheat sold for delivery in 
January is called January wheat ; cotton sold for delivery in 
July is called July cotton, and so on. The outlook in the mar- 
ket for the different months is called the position. Thus, if the 
market for January wheat is strong it is customary to say that 
the January position (in wheat) is strong; or, if the market for 
July cotton is weak it is customary to say that the July position 
(in cotton) is weak. 

Post. On the New York Stock Exchange a post is a stand- 
ard or pillar rising from the floor to mark the place where a 
particular stock is dealt in. The New York Central post, for 
instance, is where New York Central & Hudson River Rail- 
road stock is dealt in. At most posts two or more stocks are 
dealt in as there are not enough posts to allow one for each 
stock dealt in on the exchange. 

Post-bill. See Bank of England post-bill. 

Postdated. Bearing a future date. A check dated ahead 
is a postdated check. When a check is paid before the date 
written on it the money so paid can be recovered. 

Post day. London term for the day on which the dealers 
in foreign bills (foreign exchange bills) meet in the Royal Ex- 
change to transact business. 

Posted rates. The preliminary or asking rates or prices of 
a seller of foreign exchange. The posted rates are usually 
the rates exacted for small amounts of exchange, whereas 



414 SMITH'S FINANCIAL DICTIONARY.- 

large amounts are sold at the actual rates. For additional 
information see Foreign exchange rates. 

Posting. A bookkeeping term, meaning the transferring of 
entries in subsidiary books to the respective accounts in the 
ledger. 

Postoffice money order. An order purchased at a post- 
office in one place which is payable at a postoffice in another 
place to a party named when the order is purchased. Such 
an order is in fact a bill of exchange or draft. The order is 
forwarded by mail by the purchaser to the payee (the one to 
whom the amount of it is to be paid). 

Orders payable in the United States are called domestic 
money orders. Orders also are issued payable abroad; these 
are called international money orders. The charge for these 
orders is the amount of them, plus a moderate commission. 

Pound. £ ; the unit of value of Great Britain (gold stand- 
ard), equal to $4.86.85. The pound is also the unit of value of 
Egypt (gold standard), equal to $4.94.30. 

There is no British coin of the name, but the value of the 
sovereign is one pound (£1). The pound sterling was orig- 
inally a pound weight of silver divided into twenty parts 
called shillings and each shilling was divided into twelve parts 
called pennies or pennyweights. It takes twenty-six of the 
present shilling pieces to make a pound in weight. 

The pound sterling and the pound Egyptian are the largest 
monetary units in use. 

Poundage. English ; a charge of so much in the pound (£). 

Power of attorney. Written authority to act for another. 

A general power of attorney confers authority to act in 
matters generally ; a permanent power of attorney is good 
until revoked ; a special power of attorney is good only for the 
specific act which it covers. An irrevocable power of attorney 
is used in transactions in stocks and bonds. 

P. p. These letters stand for per procuration ; see Per pro- 
curation. 

PR. As printed on the tape by the stock ticker these 
letters mean preferred, as preferred stock. 

Precedence in dealings. See Floor rules. 

Preference stock. This is the English designation for stock 
that is preferred over other classes as to dividends and assets. 



. SMITH'S FINANCIAL DICTIONARY. 415 

It is equivalent to what in the United States is called preferred 
stock when there is only one class of preferred stock or to 
what is called first preferred when there are two classes. 
Preference stock is sometimes divided into classes, as first 
preference, second preference, etc., with the right to dividends 
in the order named. 

For additional information see Stock. 

Preferred creditor. A creditor who is entitled by law to 
have his claim first satisfied from his debtor's assets. The 
holder of a first mortgage or other prior lien is a preferred 
creditor. 

Preferred ordinary stock. English ; also called B stock ; 
receives a dividend at a fixed rate before any payment can be 
made on the deferred ordinary stock. For additional informa- 
tion see Preferred stock. 

Preferred stock. Stock that is preferred as to dividends and 
assets; it must receive a dividend before a dividend can be 
paid "on the common stock and in a distribution of assets it 
participates ahead of the common stock. Cumulative pre- 
ferred stock is stock the dividends on which, if not paid regu- 
larly or in full, accumulate and must be paid in the future be- 
fore a dividend can be paid on the common stock. 

Preferred stock is the English designation for preferred or- 
dinary (common) stock. When for dividend purposes the 
ordinary stock of a company has been divided into two pares 
called preferred or "B" stock and deferred or "A" stock the 
dividend on the A stock is deferred until a fixed amount has 
been paid on the B stock. 

This B or preferred stock is not the same as preferred stock 
in the United States. What in the United States is called 
preferred stock is in Great Britain called preference stock 
and preference stock in Great Britain may be divided into 
two or more classes called first preference, second preference, 
etc., just as preferred stock in the United States may be 
divided into two or more classes called first preferred, second 
preferred, etc. When, however, there is but one class of pref- 
erence stock ahead of an ordinary stock in Great Britain the 
B or preferred stock is equivalent to second preferred stock 
in the United States. 

Preference stock is sometimes divided into classes, as first 



4i6 SMITH'S FINANCIAL DICTIONARY. . 

preference, second preference, etc., with the right to dividends 
in the order named. 

Premium. The amount paid in excess of the par (face) 
value. 

When a stock, for instance, is seUing at a premium the 
premium is the amount it brings beyond its par or face value. 

When a stock is lending at a premium (see Borrowing and 
lending stocks) the premium is the amount paid by the bor- 
rower of the stock to the lender of it for the use of it. The 
purpose, usually, for which a stock is borrowed is to enable 
the borrower, who has sold it short (sold stock he did not pos- 
sess), to make delivery to the purchaser. 

In Great Britain when a stock or other security is at a 
premium the premium is reckoned at so much in the pound on 
shares and at a percentage on stock or bonds. See Percentage. 

In insurance in Great Britain the premium is the considera- 
tion paid by the policy holder for insurance. Thus, a premium 
of 20 shillings per cent means that 20 shillings is the premium 
on each £100 insured. 

For informatiofi as to premium on gold see Gold premium. 

Presentation. In financial and commercial usage prefer- 
ence is given to the word presentation over presentment as 
employed in connection with negotiable instruments, such as 
bills of exchange (drafts) and promissory notes. For in- 
stance, it is customary in financial and commercial phraseolo- 
gy to say "on presentation" (for acceptance or payment) in- 
stead of "on presentment." In legal usage preference is given 
to the word presentment. 

Presentment. See Presentation. 

President. The chief executive officer of a stock company 
is the president and he also presides (is chairman) at meetings 
of the board of directors, except when the office of chairman of 
the board exists in addition to the office of president. 

The president of a bank is its executive head. In Great 
Britain the head of a bank is the governor, as in the case of 
the Bank of England, or the manager ; in Canada the head of 
a bank is the manager general or manager resident. 

Price. The amount at which anything is valued or sold. 

Also see Quotation. 

Price current. A printed or partly printed and partly writ- 



SMITH'S FINANCIAL DICTIONARY. 417 

ten form issued periodically by brokers, dealers and others to 
customers in their trades showing the current prices of the 
goods they deal in. 

Price-mark. The name given to a word or to words or to 
a cipher or other secret device used by a merchant or other 
dealer to mark on goods their cost price and perhaps also 
their selling price, although as a rule the selling price is 
marked in plain figures. 

In a price-mark letters or signs stand for the figures or- 
dinarily used. An example of a price-mark follows: 

12 
V A 
Another example : 
I 2 
C H 
Another example : 
I 2 
C A 
Another example : 
I 2 
M A 

What is known as the old-fashioned price-mark is derived 
from the following device : 

# 

It is employed as follows, with the addition of X or O for 
the naught: 

12345 67890 

jULDDcnnrx 

Primarily liable. The person primarily liable on a negotia- 
ble instrument is the person upon whom rests the absolute re- 
quirement to pay it ; all other parties are secondarily liable. 

The maker of a note is primarily liable, while an indorser is 
secondarily liable. When a draft has been accepted the ac- 
ceptor is primarily liable, while the drawer is secondarily lia- 
ble. When, however, a draft has not been accepted the draw- 
er is primarily liable. The drawer (issuer) of a check is prim- 
arily liable, while an indorser is secondarily liable. An in- 
dorser is always secondarily liable. 

Primary points. Trade designation for large cities which 
receive grain direct from country shippers, such as Chicago, 



3 


4 


5 • 


6 


7 


8 


9 





N 


D 


E 


R 


B 


I 


L 


T 


3 


4- 


5 


6 


7 


8 


9 





E 


L 


M 


S 


F 





R 


D 


3 


4 


5 


6 


7 


8 


9 





L 


E 


B 


S 


M 


I 


T 


H 


3 


4 


5 


6 


7 


8 


9 





K 


E 


P 


R 





F 


I 


T 



4i8 SMITH'S FINANCIAL DICTIONARY. 

Detroit, Duluth, Kansas City, Minneapolis, St. Louis and 
Toledo. 

Primary receipts. Trade designation for the aggregate 
daily receipts of grain at the leading primary points ; see 
Primary points. 

Primary shipments. Trade designation for the aggregate 
daily shipments of grain from the primary points ; see Primary 
points. 

Prime bills or prime exchange. Bills of exchange (specific- 
ally foreign exchange) issued by houses of unquestioned finan- 
cial ability. 

Principal. The capital sum upon which interest is payable ; 
also, the one who employs a broker or other agent. 

A principal is responsible for the act of an agent, but an 
agent who exceeds his authority renders himself personally 
liable. 

A person who has given money to his own agent to be de- 
livered to his creditor cannot set up the claim that he has paid 
his creditor unless the money actually reaches the creditor. In 
other words, while the money is in the control of the agent of 
the debtor it is at the debtor's risk and it cannot be charged 
against the creditor any more than if it remained in the debt- 
or's own hands. 

For additional information see Agent. 

Prior lien. A lien or claim ahead of all other liens or claims. 

Prior lien bond. A bond representing a lien or claim ahead 
of all other liens or claims. 

Private banker. A person engaged in the business of bank- 
ing who is not subject to supervision by national or state au- 
thorities. 

Since the enactment of the National bank act there has been 
no incentive for private bankers to avail themselves of the 
provision of state laws. As they do not now issue circulating 
notes they prefer to conduct their business without state in- 
terference. 

Private carrier. One who carries persons or goods only by 
special arrangement. 

Private company. English ; a term applied (in contradistinc- 
tion to a public company) to a company public subscription to 
the stock of which is not invited. When a private business is 



/ 



SMITH'S FINANCIAL DICTIONARY. 419 

continued as a corporation instead of a partnership and stock 
is allotted to each partner for his interest or share in the busi- 
ness the business is said to have been converted into a private 
company. An entirely new business or enterprise, however, 
may be and often is started as a private company instead of 
a partnership. Usually there is an agreement among the 
shareholders (stockholders) whereby each is prohibited from 
disposing of or transferring his shares without the consent of 
the others. 

What in Great Britain is termed a private company is in the 
United States known as a close corporation. 

Private discount. In foreign money markets this is the 
rate of discount quoted by others than the national or govern- 
ment banks; it is usually designated as open market discount; 
see Open market discount. 

Private wire. A wire leased from a telegraph company by a 
broker or by any body for his exclusive use. 

Private-wire house. A brokerage concern which has private 
telegraph wires to its branch offices or to the offices of corre- 
spondents at other points. The telephone has superseded the 
telegraph to some extent ; private telephone wires are hired 
the same as private telegraph wires. 

Privilege. A general name for a call, put, spread or strad- 
dle, information as to each of which is furnished under its own 
title. 

There can be no loss to the buyer of a privilege beyond the 
amount paid for it. Privileges are legal and are enforceable as 
contracts, but they are not recognized by the New York Stock 
Exchange. 

xTivileges are often bought as a protection against loss on 
transactions in the stock market. Illustration : One hundred 
shares of stock are bought at 100. A put under which the 
stock can be delivered at 98 is purchased for i per cent, which 
makes the net price of the put 97. Then, if the stock goes 
down to, say, 94 the stock owned by the holder of the put can 
be put (delivered) to the issuer of the put at 98 so that the 
net loss is only 3 per cent instead of 6 per cent as would be the 
case if no put had been bought and the stock had to be sold at 
94. On the other hand, should the stock go up to, say, 106 



420 SMITH'S FINANCIAL DICTIONARY. 

only the cost of the put, i per cent, would have to be deducted 
from the profit on the stock. 

In the case of a stock sold short a call would be employed 
for protection against loss. If the stock were sold short at 
loo and if a call at 102 were purchased for i per cent and the 
stock advanced to 106 the net loss would be only 3 per cent, 
as against -6 per cent if no call had been purchased and the 
stock had to be covered (bought back) at 106. If the stocK 
against which the put was bought went down to 94 only a de- 
duction of I per cent, the cost of the put, would have to be 
maae from the profit on the stock. 

Calls and puts on grain are based on the same general prin- 
ciples as those on stocks, but they are not employed to any 
extent except to limit loss. In some states puts and calls on 
grain are illegal. 

Privilege broker. A broker who handles or deals in privi- 
leges — that is, puts, calls, spreads and straddles. 

Procuration. See Per procuration. 

Professional speculation. Speculation (as in stocks, grain, 
cotton, coffee, etc.) by men who are adepts in it or who make 
a regular business of it. 

Professional speculator. One who is adept at or who makes 
a regular business of speculation (as in stocks, grain, cotton, 
cofTee, etc.). 

Profit. Excess of receipts over expenditures. Gross profit 
is the remainder after deduction of first cost; net profit is the 
remainder after deduction of cost and all charges (as interest 
or wages, etc.). 

Profit and loss account. The surplus income account. In 
a balance sheet a profit and loss deficit appears as a debit ; a 
profit and loss surplus appears as a credit. 

The profit or loss of a company is shown by the change in 
the profit and loss item. This change, plus dividends paid, 
shows the actual profit. 

Pro forma. For the sake of form ; the term is frequently 
used in mercantile business. 

A pro forma account is a specimen statement showing what 
it is considered, in the current state of the market, goods 
would realize. Such an account is in the same form as one 
used in an actual transaction except that the prices are tenta- 



SMITH'S FINANCIAL DICTIONARY. 421 

tive — are examples merely. The purpose of a pro forma ac- 
count is to furnish to the one to whom it is rendered or sent 
the value or cost of a consignment or shipment of goods in the 
existing state of the market. 

A pro forma account sales is asked for by a prospective 
seller of goods on consignment (consignor) when he desires 
to know what sum goods which he has for disposal would 
bring. 

A pro forma invoice is asked for by a prospective purchaser 
who desires to obtain from the seller prices and charges on 
certain goods. 

Promissory note. A written engagement by one person to 
pay unconditionally to another therein named (or to his or- 
der or to the bearer) a certain sum of money at a specified 
time. 

A note bears interest before maturity only when so stated. 
"Value received" is usually written in a note but is not nec- 
essary ; if not written it is presumed by the law to be or the 
deficiency may be supplied by proof. If the amount stated in 
words and the amount stated in figures do not agree the words 
govern. 

A note given without consideration cannot be enforced by a 
holder having knowledge of that fact, but a note given without 
consideration may be enforced by a person not having a 
knowledge of that fact who purchased it for a consideration. 

If the holder of a note fails to present it for payment 
promptly at maturity the maker is not thereby discharged 
from his liability. If the note was payable at a specified place 
and the maker was there at the date when due prepared to 
pay it this amounted to a legal tender of payment and the 
maker cannot thereafter be charged with interest as being in 
default. But the principal of the note he is still legally bound 
to pay. 

If there are other persons who are only secondarily liable up- 
on the paper, (indorsers or others who have undertaken to 
pay it if it is promptly presented to the person primarily lia- 
ble upon it, that is, the maker, and by him dishonored) they 
will be released if prompt presentation be not made to the orig- 
inal party, that is, the maker. But the obligation of the latter 
is absolute and not dependent upon any such condition as 
prompt presentation. 



422 SMITH'S FINANCIAL DICTIONARY. 

When a note is payable at a bank or any other specified 
place it is the duty of the holder to present it at the bank or 
place promptly on the day when it becomes due. The holder 
is liable for any loss resulting from the failure to make due 
presentation. But if there is no loss there is no liability. 

In New York state a note made payable at a bank in which 
the maker is a depositor constitutes an order to the banC to 
pay the same as if it were a check. Neither form of paper 
takes precedence of the other and the bank is to pay them in 
the order in which they are presented . 

When a creditor consents to take in payment of a debt a 
bill or note payable at a future day this act constitutes an 
agreement for delay. The debt is not extinguished, but the 
creditor cannot begin an action upon it until the bill or note 
falls due and default in payment is made. 

In the case of a note made in one state and payable in an- 
other state any question as to its legality must be tested in the 
state where it is payable. Interest is chargeable at the legal 
rate in the state where the note is payable. 

If a note is lost or stolen the maker is not released from 
payment ; he must pay it if the consideration for which it was 
given and the amount can be proved. 

When a note is discounted by a bank with which the maker 
has an account the amount of the note must be charged 
against the account otherwise the indorsers, if there be any, 
are released from responsibility. 

If A buys of B on credit and it is not specified that a note 
shall be given for the indebtedness the buyer cannot be com- 
pelled to give a note unless there is a custom of the trade to 
that effect or unless the previous course of dealing between 
the two has been such as to imply an agreement that a note 
should be executed to cover the indebtedness. 

For additional information see Collateral note ; also see Ne- 
gotiable instrument. 

Promoter. One who especially assists, by securing capital, 
in starting or forwarding (promoting) a company. This com- 
pensation (pay) is generally in stock of the company (and gen- 
erally in common stock if both preferred and common are 
issued). 



SMITH'S FINANCIAL DICTIONARY. 423 

Promoter's stock. Stock issued to a promoter for his ser- 
vices in promoting or aiding in the organization of a company ; 
see Promoter. 

Prompt. A commercial term, meaning the date fixed for 
payment. When goods are sold with a prompt the goods 
must be taken up and paid for on the date specified. Thus, 
when goods are sold with a 60-day prompt the buyer must re- 
ceive and pay for the goods at the end of 60 days. 

Prompt cash. Immediate cash payment. 

Prompt note. A commercial term ; a note or memorandum 
delivered by the seller to the purchaser of goods specifying the 
sum due and the date of payment. 

Proof piece. One of the first coins struck from a new die, 
Avhich may be the die for a new coin or a new die for an old 
coin. It is a perfect coin, specially polished, and is prized by 
numismatists. New dies for all coins are employed at the be- 
ginning of each year bearing the date of the new year and 
old dies bearing the date of the preceding year are destroyed. 

Proportion of reserve to liabilities. This term is applied to 
the percentage of its deposits held in cash by a bank. See 
Reserve. 

Proprietary company. One which owns, or at least owns 
control, of another company, while not operating it; same as 
controlling company. 

Prospectus. A paper or pamphlet containing information 
as to a proposed undertaking; a summary or outline of a plan 
or scheme. 

Protest. A notarial certificate that a promissory note or 
bill of exchange has been presented for acceptance or for pay- 
ment and that acceptance or payment has been refused. 

On the day of the maturity of a note or bill of exchange (the 
day on which payment is due) or the day on which a bill of 
exchange should be presented for acceptance the notary, with 
the instrument in his possession, must present it at the place 
where it is payable or where acceptance is to be made and on 
refusal or failure to obtain payment or acceptance he must 
notify in person or by mail the indorsers (in case of a 
bill of exchange that is without indorsement he must notify 
the drawer). If no place of payment in the case of a bill or 
note calling for payment is mentioned in the instrument it 
must be presented at the place of business of the payer (the 



424 SMITH'S FINANCIAL DICTIONARY. 

one who is to pay it) ; if there is no such place of business then 
it must be presented at the payer's place of residence. 

When a draft or note is not paid at maturity and it is for- 
mally protested and so inscribed this step establishes a basis 
of proceeding by law for the collection of the amount of it. 
When an indorsed draft or note is protested a demand for its 
payment may be made upon the indorser. The amount of a 
protest fee is added to and becomes part of the principal. In- 
terest continues on the whole until payment of the note is final- 
ly made. 

The effect of a protest is to prevent the release of the in- 
dorsers on an instrument. Such parties are discharged if tiie 
instrument is not protested. 

When a bill has been noted the protest may be extended as 
of (back to) the day of noting. The protest should be com- 
menced on the day on which acceptance or payment is re- 
fused, but it may be drawn up and completed at any time be- 
fore the commencement of suit or even before or during trial 
and be antedated accordingly. 

If a bank holds for collection a check which has been al- 
lowed to go to protest and if the drawer afterwards makes 
a sufficient deposit to cover the check, without specific in- 
structions, the bank may apply the deposit to the payment of 
the check. The authority of the bank to make the collection 
continues, the maker of the check has not revoked the au- 
thority to pay contained in it, he has made a general deposit 
without any instructions as to the disposition which is to be 
made of it and every element is present which is necessary to 
confer upon the bank a right to honor the check. 

Protest for non-acceptance. Protest on refusal of the 
drawee (the one drawn on) to accept a bill of exchange or 
draft. For additional information see Protest. 

Protest for non-payment. Protest on refusal of the maker 
of a promissory note or the drawee of a bill of exchange or 
draft to pay it at maturity (when due). For additional in- 
formation see Protest. 

Protest waived. When an indorser writes above his in- 
dorsement (signature) "Protest waived" the necessity of pro- 
testing the instrument to hold the indorser is dispensed with. 

Provisions. Under this head in the country's exports come 



SMITH'S FINANCIAL DICTIONARY. 425 

beef, fresh, salted, pickled or otherwise cured or canned ; 
tallow, bacon, hams ; pork, fresh, salted, pickled or canned ; 
lard, lard compounds and substitutes for lard, such as cot- 
tolene, lardine, etc.; mutton, oleo (the oil), oleomargarine 
(imitation butter), poultry and game; sausage and sausage 
meats, sausage casings and all other meat products ; butter, 
cheese and milk. 

Proxy. A person who is empowered to represent another 
in a given matter ; the name is also given to the instrument by 
which a person is empowered so to act. 

A person who votes by proxy on stock belonging to another 
is said to hold a proxy on the stock. 

P. T. Used in the grain trade ; signifies private terms. 

Public company. English ; a term applied (in contradistinc- 
tion to a private company) to a company to the stock of which 
the general public is invited to subscribe . 

Public credit. The reputation and ability of a government 
to pay its obligations. 

Public credit act. On March 18, 1869, Congress pledged 
the faith of the United States to the payment of United States 
notes (greenbacks) in coin or its equivalent and to make pro- 
vision at the earliest possible period for their redemption in 
coin. 

Public debt. Same as national debt; the debt due from a 
nation to individual creditors. 

The public debt of the United States consists of bonds, Unit- 
ed States notes (greenbacks), old demand notes (notes issued 
prior to the present United States notes), National bank 
notes for the redemption of which money has been deposited 
by the issuing banks, fractional currency, gold certificates 
and Treasury notes (issued for the purchase of silver bullion). 

Public depository. A bank, trust company or other insti- 
tution legally designated to receive deposits of public funds. 
The institution usually is required to provide a bond or other 
security for the safe keeping and return of the funds; some- 
times it is required to pay interest on these funds at a rate 
fixed by law. 

Public funds. An English term, meaning the debts of the 
British government. 



426 SMITH'S FINANCIAL DICTIONARY. 

Public loan. Money borrowed by a government at a speci- 
fied rate of interest. 

Public securities. Securities issued by the government and 
by states, counties and municipalities. 

Public stock. A former name for the interest-bearing ob- 
ligations of the government represented by certificates; now 
called bonds. 

Punitive damages. Same as exemplary damages ; an 
amount allowed as punishment for a malicious or aggravated 
injury. 

Punter. London Stock Exchange name for a constant spec- 
ulator who is satisfied with small profits ; it means the same 
as the term scalper on the New York Stock Exchange. 

PUR. As printed on the tape by the stock ticker these let- 
ters mean purchasing receipt. 

Purchase money. The money paid or agreed to be paid for 
property bought. 

Put. A put (on a stock) is a contract or written agree- 
ment binding the issuer to receive from the holder stock 
named in the agreement within a certain time at a certain 
price if the holder shall so demand, or in other words, shall 
elect to deliver (put) the stock. For example, A signs a 
promise to receive lOO shares of some specified stock from B 
at loo at any time within 60 days if B so demands. A sells 
th!s promise to B for, say, $100. If within the 60 days the 
stock falls in price so that B can buy it at a profit B buys it 
at the lower price and calls on A to receive the stock. The 
stock must go below 99 before there is a profit for B. If the 
stock advances or does not fall below 99 B, of course, does 
not deliver (put) it and A makes $100 on his risk. In deliver- 
ing the stock B must give one day's notice, except on the last 
day, when no notice is required. 

If a dividend becomes due on a stock during the pendency 
of a put on it the dividend goes to the seller of the put if the 
stock is put (delivered) to him. A dividend always goes with 
the stock. 

A put on grain or any other speculative commodity is based 
on the same general principle as in the case of stocks. 

For additional information see Privilege. 



SMITH'S FINANCIAL DICTIONARY. 427 

Put and call broker. A broker who handles or deals in 
privileges — that is, puts, calls, spreads and straddles. 

Put of more. London Stock Exchange term ; a put of more 
gives the holder the right to put (deliver) to the buyer an ad- 
ditional amount of stock equal to the amount named in the 
bargain, or in other words, to put twice as much stock as is 
named in the contract. If a man sells £1,000 consols, with the 
put of more, at 96 1-2 he can deliver £2,000 to the buyer. For 
this extra right or privilege the holder of the put pays an ex- 
tra price. 

Pyramiding. A system of enlarging operations by use of 
paper profits (profits in transactions not yet closed and con- 
sequently not yet in hand). 

Illustration : One hundred shares of stock of the par value 
of 100 is bought at 10 on a margin of 5 per cent. The stock 
advances to 15. There is a profit of 5 per cent which can be 
used as margin in the purchase of 100 shares more. The price 
goes up to 20. There is then a profit of 5 per cent on the 
second lot and an additional profit of 5 per cent on the first 
lot, so that there is an unencumbered profit of 10 per cent on 
100 shares or 5 per cent on 200 shares. The profit is utilized 
as margin for the purchase of 200 shares more. The price goes 
up to 25. Then there is an unencumbered profit of 5 per cent 
on the whole 400 shares or 20 per cent on 100 shares. This 
profit is used to buy 400 shares more. 

Then, perhaps, the price drops back to 20. There being 
only 5 per cent margin on the whole 800 shares the whole ac- 
cumulated profit of $3,500 disappears, as well as the margin of 
5 per cent provided for the purchase of the first 100 shares. 
Should the price go on up to 30, however, the profits would 
be increased by $4,000 which would provide 5 per cent margin 
for 800 shares more of stock, making the total amount of stock 
held 1,600 shares 1,500 of which would have been purchased 
with profits. 

Selling stock at intervals on a decline, using profits for 
margin, is pyramiding, as well as buying it on profits on an 
advance. 

Pyx. A receptacle for coins selected for trial as to fine- 
ness and weight at a mint. 



428 ' SMITH'S FINANCIAL DICTIONARY. 



Q 



Quadrangular operation in exchange. An operation in 
which four places are involved. For additional information 
see Arbitration of exchange. 

Qualified indorsement. An indorsement without recourse ; 
see Without recourse. 

Quarter. A quarter of wheat comprises eight bushels or 
480 pounds. 

Quarter-dollar. The silver coin weighing 96.45 grains ; it is 
.045 inch thick and its diameter is .95 inch. 

Quarter-eagle. The name given to the $2.50 gold coin of 
the United States ; weight, .64.5 grains ; thickness, .034 inch ; 
diameter .75 inch. 

Quarter-stock. Stock of the par value of $25, instead of 
$100. 

Quick assets. Property applicable to the payment of debts 
which is quickly convertible into cash. 

Quid. English colloquialism for £1 (one pound sterling). 

Quintal. A metric measure equal to 220.46 pounds avoirdu- 
pois. 

Quotation. As commonly used the term quotation means 
price. 

Stock quotations are in eighths of i per cent ; grain quota- 
tions and quotations for pork, lard and short ribs are in 
eighths of a cent ; cotton quotations are in hundredths of a 
cent, one hundredth being a point; coffee quotations are in 
hundredths of a cent, one hundredth being a point, but a dif- 
ference or change in a quotation cannot be less than five 
hundredths ; silver bullion quotations are in eighths of a cent. 

On the London Stock Exchange quotations are for the most 

part in pounds and fractions of a pound. Fractions of £1 

(one pound), rising by 1-16, with their equivalents, are: 

shillings 3 pence 
6 " 
9 " 
o " 

6 " 
9 " 



I-I6 


equal 


to 


I 


shilling 


3 


pence 


9-16 equal 


to II 


1-8 


« 


(( 


2 


shillings 


6 




5-8 " 


" 12 


3-16 


(( 


(( 


3 


(( 


9 




11-16 " 


" 13 


1-4 


(( 


(( 


5 


« 







3-4 " 


" 15 


5-16 


(( 


(( 


6 


(< 


3 




13-16 " 


" 16 


3-8 


(( 


(( 


7 


« 


6 




7-8 " 


" 17 


7-16 


« 


(( 


8 


« 


9 




15-16 " 


" 18 


1-2 


(( 


(( 


10 


(( 












SMITH'S FINANCIAL DICTIONARY. 429 

British consols are not quoted in pounds and fractions of 
pounds, but by percentage the same as stocks and bonds are 
quoted on the New York Stock Exchange. 

On the London Stock Exchange the jobber (dealer) when 
asked for his quotations gives both a buying and selling price. 
If, for instance, he says 99 7-8 — 100 1-8 he means that he will 
pay 99 7-8 for the stock or will sell at 100 1-8. 

Also see Percentage. 

Quotations for exchange. Same as exchange rates ; see Ex- 
change rates. 



R 



R. As printed on the tape by the stock ticker this letter 
means registered, as registered bonds. 

Also, the letter R when written in a memorandum (report) 
of a transaction in stocks or bonds means bought (or sold) in 
the regular way; see Regular way. 

Also, the letter R stands for rupee, the monetary unit of 
India. 

Ra^gg^d bond. A bond from which coupons not yet due 
have become detached. In such a case the coupons are pinned 
to the bond. 

Rag money. A colloquial name for depreciated paper 
money. This name was applied to the United States note 
(greenback) when it circulated at a discount prior to the re- 
sumption of specie payments in 1879. 

Rail. Abbreviation used on the London Stock Exchange 
for the stock of a railroad company. 

Also see Railroad rail. 

Railbird. A name given to a speculator who hung on 
(stood outside) a rail that formerly encircled or partly en- 
circled the board room (trading room) of the New York 
Stock Exchange. Non-members on payment of an annual 
subscription were allowed to enter the exchange, although re- 



420 SMITH'S FINANCIAL DICTIONARY. 

quired to remain outside of the rail. They were officially 
known as subscribers. The privilege obtained by subscribers 
enabled them to take quick advantage of changes in prices by 
reason of their being on the scene and having prompt access 
to their brokers. 

Railroad earnings. In compiling railroad reports the total 
earnings or receipts from traffic are set down as gross earn- 
ings and the remainder, after deducting operating expenses 
(cost of handling traffic), is net earnings. To net earnings is 
added other income (usually derived from investments, which 
are often in the form of securities held to control other roads) 
and the total is gross income (as distinguished from gross earn- 
ings). From gross income are paid rentals and other charges, 
interest requirements (commonly called fixed charges), etc. 
The remainder is designated as net income. From it are paid 
dividends and what is left is surplus. 

In reporting gross earnings it is the practise to divide each 
month into four weeks. The first seven days are counted as 
the first week, the second seven days as the second week and 
the third seven days as the third week, while the remaining 
days of the month are counted as the fourth week. In a 
month of 30 days the fourth week consists of nine days and 
in a month of 31 days it consists of ten days. Thus, the 
fourth week may contain two Sundays. 

The custom is to compare railroad earnings in a given 
period with those in the corresponding period in the 
year before. Railroad traffic is light on Sunday, so that 
when a fourth week containing two Sundays is com- 
pared with a fourth week containing only one Sunday, 
or vice versa, allowance must be made for the difference in 
the number of working days (week days). Likewise, in a 
monthly report of earnings a month may contain five Sun- 
days, whereas the same month in the preceeding year may 
have contained only four Sundays, or the reverse. 

A railroad as a rule makes a weekly report of gross earn- 
ings ; it makes a monthly report of gross and net earnings, 
with deductions for charges of all kinds, so that a monthly 
report takes account of everything in the month in ques- 
tion ; and finally the road makes a yearly (annual) re- 
port which is a consolidation of the twelve monthly reports 



SMITH'S FINANCIAL DICTIONARY. 431 

with details added and with remarks by the president and 
other officers. 

Railroad pass. A ticket or certificate which confers the 
privilege of riding free on the railroad by which it is issued. 

Railroad rail. The rail used on a railroad is reckoned by 
weight at so much per yard (3 feet). Thus, a 60-pound rail 
weighs 60 pounds to the yard, an 80-pound rail 80 pounds 
to the yard, and so on. The customary length of a rail is 30 
feet. 

Railroad returns. Reports of railroad earnings ; see Rail- 
road earnings. 

Railroad traffic. Passengers and freight (merchandise, 
etc.) transported by a railroad. 

Raised check. A check in which the amount as originally 
written has been fraudulently increased. 

A bank which pays a raised check is responsible for the 
difference between the amount authorized to be paid and the 
amount actually paid. There are circumstances, however, in 
which responsibility may not attach to the bank. A person 
may make out a check for $25 and leave a space between the 
words "twenty-five" and the word "dollars" and also leave 
blank the space where the amount is to be written in figures. 
Then, if "hundred" is written after the words "twenty-five" 
and "$2,500" is written in the space provided for the amount 
in figures so that the check calls for the payment of $2,500 
instead of $25 the bank escapes responsibility for the reason 
that there was negligence in making out the check. 

Again, if a check is made payable to a person designated 
by name, but space is left after the name so that "or bearer" 
may be written in the bank is not responsible if it makes 
payment to a person other than the one intended. 

Rates for money. See Money rates. 

Rates of exchange. See Domestic exchange rates ; also see 
Foreign exchange rates. 

Rating. Grading or classifying. 

The term rating as applied to the credit of an individual, 
firm or corporation means an estimate of his or its ability and 
disposition to fulfil financial obligations. 

Ratio. In coinage ratio is the term used to express the 



432 



SMITH'S FINANCIAL DICTIONARY. 



equivalent between gold and silver. The ratio of i6 to i, for 
insitance, means that i ounce of gold is counted as worth i6 
ounces of silver. 

In the United States the ratio of the silver dollar (the 
coin) to the gold dollar (the coin) is 15.988 (or nearly 16) 
to I ; the ratio of the subsidiary silver coins (half-dollar, quar- 
ter-dollar and dime) to the gold dollar is 14.953 to i. 

The actual or market ratio of gold and silver is ascertained 
by dividing the commercial (market) price of an ounce of fine 
(pure) silver into the value of an ounce of fine gold, which is 
fixed at $20.67.2. 

The coinage value in gold of an ounce of fine silver is as fol- 
lows at ratios of i to 15 up to i to 40: 



Ratio. 



Value of 

an ounce 

of fine 

silver. 



I to 15 

I to 15^ 

I to 15.988 

U. S. ratio 

I to 16 

I to 16^ 

I to 17 

I to 17^ 

I to 18 

I to 18^.... 

I to 19 

I to 19^ 

I to 20 

I to 203^ 

I to 21 

I to 21 V2 

I to 22 

I to 22^ 



$1.3780 
1.3336 

1.2929 
I.2919 

1.2527 

I.2159 
I.181I 
T.I483 
I.I 173 
1.0879 
1.0600 

1.0335 
1.0083 

.9843 
.9614 

.9396 
.9187 



Ratio. 



to 
to 
to 
to 
to 
to 
to 
to 
to 
to 
to 
to 



I to 



to 
to 
to 
to 
to 



23.. 

24.. 

24>^ 

25.. 

25^ 
26.. 
26^ 
27.. 
27^ 
28.. 
28^ 
29.. 

29H 
30.. 

30^ 

31.- 

31^ 



Value of 

an ounce 

of fine 

silver. 



$0.8987 
.8796 
.8613 
.8437 
.8268 
.8106 
.7950 
.7800 
.7656 

•7517 
.7382 

.7253 
.7109 
.7007 
.6890 
.6777 

.6668 
.6562 



Ratio. 



to 2,2... 
to 32^- 
to 2?,--- 

to Z2>y2. 

to 34... 
to 34^- 
to 35..- 
to 35^. 
to 36. .. 
to 36^4. 
to 37... 
to 37^. 
to 38... 
to 38^4. 
to 39... 
to zgYz. 
to 40. .. 



Value of 

an ounce 

of fine 

silver. 



$0.6459 
.6360 
.6264 
.6171 
.6080 
.5992 
.5906 
.5823 
.5742 
.5663 
.5587 
.5512 
.5439 
.5369 
.5300 

•5233 
.5168 



Ratio of reserve to liabilities. This term is applied to the 
percentage of its deposits held in cash by a bank. 

RE. As printed on the tape by the stock ticker these letters 
mean real estate, as real estate bonds. 

Reaction. A fall in prices after an advance. 

Readjustment. Sometimes called simply adjustment; a re- 
adjustment is when the financial reconstruction or rehabilita- 
tion of a railroad or other corporation is voluntary — that is, 
by concurrence of the security holders. Reorganization, as 
distinguished from readjustment, is when the financial recon- 



SMITH'S FINANCIAL DICTIONARY. 433 

struction is compulsory — that is, when it is effected by a 
receivership and foreclosure. 

In a readjustment (a financial reconstruction that is volun- 
tary) bondholders may exchange their bonds for new bonds 
bearing a lower rate of interest than the old ones, but in such 
a case the loss in interest is compensated for by the delivery 
to the holders of the bonds who make the exchange of a bonus 
in (a gift of) stock or in some other security, such as income 
bonds (income bonds receive interest only if earned). Or, 
the bondholders may exchange their bonds for a smaller 
amount of new bonds, receiving stock or income bonds as 
compensation for the surrender of a portion of their holdings. 

Again, cumulative stock may be exchanged for a larger 
amount of non-cumulative stock. Or, the exchange may be 
on even terms, with compensation for the surrender of the 
cumulative right on the stock. The compensation usually 
takes the form of a bonus of some kind, as, for instance, in- 
come bonds. 

Financial readjustments without foreclosure to enforce them 
are not numerous. 

Bonds and stock the holders of which agree to accept the 
teims of a readjustment plan are termed assenting bonds 
and stock; bonds and stock the holders of which do not ac- 
cept the terms of a readjustment plan are termed non-assent- 
ing or unassenting bonds and stock. 

Also see Reorganization. 

Ready money. Money in hand ; money immediately avail- 
able. 

Real damages. A legal term ; actual or express damages. 

Real estate bond. A bond issued under a mortgage on real 
estate. 

Realizing. Selling or buying stocks, as the case may be, in 
order to secure profits that have accumulated. 

Real money. Actual gold or silver, as the case may be, in 
which values are measured. Representative money is the 
promise to pay real money on demand and is used either for 
convenience in handling or to augment the supply. 

Real stock. Stock in the hands of an actual owner. Sales 
of real stock mean sales by genuine holders of stock which 



434 SMITH'S FINANCIAL DICTIONARY. 

will be delivered, as opposed to short or bear sales by specula- 
tors. 

Rebate. Same as drawback. When part of an amount 
paid is returned such return is designated a rebate. 

A rebate on imported goods on which duty has been paid 
is a repayment, in part or in whole, of the duties on the sub- 
sequent exportation of the same goods in their original or in 
another form. 

A rebate on freight rates is a repayment, in ,part, of the 
rales (or charges). 

Rebate rate. The name given to the rate of drawback or 
allowance for the payment before maturity (before due) of a 
time bill of exchange. A deduction is made from the amount 
of the bill equal to interest at an agreed rate for the unexpired 
time which the bill has to run. 

Receipt. An acknowledgment of the payment of money 
or discharge of an obligation or an acknowledgment of 
the possession of something. 

A receipt for money is not always conclusive. A receipt is 
held to be true until shown to be false. The one who alleges 
its falsity must prove his allegation. When proved to be in- 
correct or false a receipt ceases to be binding. A check de- 
livered and paid is the best kind of evidence of the payment of 
an obligation. 

It is a common practise of express companies to issue re- 
ceipts relieving them of liability beyond $50 for loss unless 
the value of the package is given at the time of shipment. 
This has been held to be a reasonable condition on the ground 
that the express company in accepting goods of greater value 
than $50 is entitled to be informed of the full value if it is to 
be held responsible therefor in order that it may charge 
more for its service and take better care of the goods. When 
a receipt containing a limitation of liability is accepted by the 
shipper he is assumed to have assented to the condition and 
he is accordingly bound by it. 

Receiver. A person appointed by the court to take into his 
custody, control and management the property or funds of an- 
other (or of a corporation) pending judicial action concern- 
ing them. He is an officer of the court, represents it and is 



SMITH'S FINANCIAL DICTIONARY. 435 

amenable to its orders as to the property and any interference 
with his authority is contempt of court. 

Receiver's certificate. A certificate issued by a receiver for 
the purpose of raising money for a corporation that is within 
the jurisdiction of a court. Such a certificate constitutes a 
first lien upon the net earnings and property of the corpora- 
tion. 

Receivership. The ofiice and functions of a receiver. 

Receive ticket. A memorandum ticket given by the buyer 
of stocks or bonds in confirmation of the transaction pre- 
vious to the delivery of the securities. This operation is called 
comparison ; see Comparison. 

Receiving house. Trade name for a concern whose busi- 
ness is the receiving and selling of cash grain (cash grain 
being the actual cereal and not the contracts entered into in 
speculative operations). - 

Receiving teller. The clerk in a bank who receives de- 
posits ; often called second teller. 

Reclamation.. A demand for the substitution of a security 
that is a delivery when a security that is not a delivery has 
been delivered. For information see Rules for delivery. 

When a bank for some reason rejects a check or draft re- 
ceived through the clearing house it makes reclamation for 
the amount on the bank which sent it to the clearing house. 

Recoinage. The melting of worn (abraded) coins and the 
recoinage of them. An appropriation is annually made by 
Congress to cover the loss on the recoinage of worn pieces. 

Reconstruction. The English term for reorganization ; see 
Reorganization. 

Recovery. A rally in prices after a decline. 

Redback. A name given to a non-interest-bearing treasury 
note of the former Republic of Texas, issued in 1838. The 
name was derived from the fact that the back of the note was 
printed in red. 

Red dog money. In the early part of the last century 
(prior to the formation of the State Bank of Indiana in 1834) 
the state of Indiana issued circulating notes (money) in de- 
nominations of $5, $10 and $20. They were receivable for 
taxes and bore interest. They depreciated in value to 60 
cents on the dollar and the opprobrious name of "red dog 



436 SMITH'S FINANCIAL DICTIONARY. 

money" was applied to them. They were all finally redeemed 
at their full value. 

The term "red dog money" (or yellow dog money) came 
into general use in describing depreciated notes issued by 
other states and by banks in other states than Indiana. The 
term was practically synonymous with "wildcat money;" see 
Wildcat money. 

Redeemable bond. One which may be redeemed (paid) at 
some specified future time, after which interest on it ceases. 
The English name is redeemable stock. 

Redemption. The payment of a debt, as the redemption 
(payment) of bonds or the redemption by a bank of its notes. 

Redemption agent. The name given to a bank which is a 
member of the clearing house and which clears for another 
bank which is not a member; also called clearing house 
agent. A bank which is a clearing house member can act for 
a bank which is not a member only by consent of the clearing 
hcuse committee. 

Formerly a national bank not located in a reserve city 
might, in addition to redeeming its own notes at its place of 
business, designate another national bank in any of the re- 
serve cities specified in the National bank act as an agent for 
the redemption of its notes. The act of June 20, 1874, 
abolished the provision for redemption agents and compelled 
national banks to keep in the Treasury for the redemption of 
their notes an amount of lawful money equal to 5 per cent of 
their notes outstanding. They were allowed to count this 5 
per cent in their reserves held against deposits. The Treas- 
ury thus became the redemption agent of the national banks, 
but they were not relieved of the obligation of redeeming their 
own notes on demand. 

Redemption cities. Reserve cities, the national banks in 
which were formerly permitted to act as agents for the re- 
demption of notes issued by national banks not located in re- 
serve cities. The act of June 20, 1874, abolished this pro- 
vision. Notes of national banks are now redeemed by the 
banks issuing them or by the Treasury. 

Redemption drawing. A drawing for the redemption (pay- 
ment) of bonds, the terms under which they were issued per- 
mitting redemption in such manner. A drawing usually takes 



SMITH'S FINANCIAL DICTIONARY. 437 

place at stated intervals and the bonds bearing the numbers 
drawn are redeemed. 

Redemption fund. The gold standard act of March 14, 
1900, provided that a fund of $150,000,000 in gold should be set 
aside and maintained for the redemption of United States 
notes (greenbacks) and Treasury notes (notes issued under 
the Sherman act for the purchase of silver bullion). United 
States notes so redeemed may be reissued for gold. 

Also, a redemption fund is a fund established for the re- 
demption of a private debt (as the bonded debt of a corpora- 
tion) as well as a public debt. 

Rediscount. The resale of a promissory note or bill of ex- 
change (draft). For instance, when a note has been sold and 
the buyer sells it again it is rediscounted. 

Red list. A list (longer than the blue list) of practically 
all the stocks actively dealt in on the New York Stock Ex- 
change printed on red paper daily. The high, low and last 
prices are given, together with the number of shares of each 
stock dealt in. 

Re-draft. This is a draft on the drawer of a bill of ex- 
change for the amount of it and the protest- fee and other 
charges when the draft has been dishonored by the drawee 
(the one who was to have paid it). 

Re-exchange. When a bill of exchange is dishonored by 
the drawee (the one upon whom it is drawn) and is paid by 
another party for the honor of (for the account of) the 
drawer the party paying it draws for the amount of it, to- 
gether with the protest fee and other charges, upon the 
drawer. This operation is called re-exchange. 

Re-exports. Raw material imported and then exported as 
finished articles. 

Refunding. To fund anew ; to replace by a new loan. 

Refunding acts. The first general refunding act was ap- 
proved July 14, 1870, and the second was approved January 
20, 1871. Under these acts about $1,400,000,000 bonds were 
issued of which $500,000,000 were 5 per cent ten-year bonds, 
redeemable May i, 1881 ; $185,000,000 were 4 1-2 per cent 
fifteen-year bonds, redeemable September i, 1891, and the re- 
mainder were 4 per cent thirty-year bonds, redeemable July 
I, 1902. 



438 SMITH'S FINANCIAL DICTIONARY. 

The gold standard act of March 14, 1900, provided for the 
redemption into 2 per cent thirty-year bonds of the 5 per 
cent bonds payable February i, 1904, the 4 per cent bonds 
payable July i, 1907, and the 3 per cent bonds payable August 
I, 1908. 

Registered bond. A registered bond is one registered in 
the name of the owner and the bond itself bears his name. Such 
a bond is transferable the same as a stock certificate. The 
bond itself contains a form for assignment and transfer. 
When a registered bond is transferred a new bond is issued 
for the old one just as when a stock certificate is transferred a 
new certificate is issued for the old one. 

The interest on a registered bond is paid by check, which is 
sent by mail to the postoffice address of the owner of the 
bond. Due notice of change of address should, therefore, be 
given. The old address should be given as well as the new 
one. 

There are some registered coupon bonds, but such issues 
are not numerous. 

Registered coupon bond. A bond the principal of which 
is payable only to the one whose name is inscribed on it and 
in whose name also the bond is registered (entered on the 
books of the company issuing it), while the coupons calling 
for the payment of the interest as it becomes due are payable 
to bearer. 

Registered letter or registered mail matter. When a letter 
or parcel sent by mail is registered the postmaster of the post- 
office where it is received makes a formal record of it and fur- 
nishes a receipt for it to the sender and returns to the sender 
an acknowledgment in writing by the one to whom it was 
sent of its delivery to him. Special care is taken in the trans- 
mission of the letter or parcel, but the government will not 
make restitution in case of loss. 

Registered stock. In Great Britain registered stock is 
stock registered in the name of the owner in the books of the 
company issuing it, although the owner receives a certificate 
of stock as well.. This certificate, however, is not a negotiable 
instrument ; the possession of it does not carry with it the 
ownership of the stock. Before the stock can be transferred 



SMITH'S FINANCIAL DICTIONARY. 439 

to another the signature of the owner (or of his attorney) is 
again required ; the certificate must also be surrendered. 

Registrar. A bank or trust company appointed by a com- 
pany to keep a record of its stock and to certify that the name 
on the certificate is that of the owner of record. 

A registrar acts as a check on the transfer agent (or trans- 
fer office) and certifies when new certificates are issued that 
the old ones have been canceled. Thus, there can be no over- 
issue or duplication of stock. 

Regret. See Allotment and regret. 

Regular lot. In transactions on the New York Stock Ex- 
change a regular lot is 100 shares of stock or $10,000 of 
iDonds ; the rules of the exchange provide that an offer to buy 
or sell shall be accompanied with a specific number of shares 
or amount (face value) of bonds, but when no number or 
amount is named it shall be considered to be for 100 shares of 
stock or $10,000 (face value) of bonds. 

Regular lots of commodities are: Grain, 5,000 bushels; 
lard, 250 tierces (85,000 pounds) ; pork, 250 barrels ; short 
ribs, 50,000 pounds; cotton, 100 bales (50,000 pounds) ; coffee, 
250 bags, (32,500 pounds) ; silver bullion 1,000 ounces. 

On the London Stock Exchange an order to buy (or sell) 
I means to buy (-or sell) stock of the total par or face value of 
£1,000. Accordingly, 1-2 means £500 and 5 means £5,000. 

Regular notice. Speculation in commodities (grain, cotton, 
coffee etc.) is in certificates (warehouse receipts which call 
for the actual property). On a future contract (a contract 
calling for the delivery of the commodity in a specified future 
month) which is at seller's option a certain number (according 
to the rules of an exchange) of days' notice must be given by 
the seller to the buyer of an intention to deliver the commodity 
(that is, the certificate representing it) and collect payment 
for it. When the contract is at buyer's option a certain number 
of days' notice to make delivery must be given by the buyer to 
the seller. This notice is called a regular notice. There also 
is a short notice ; see Short notice. 

Regular way. The term employed on the New York Stock 
Exchange to designate a transaction when delivery of the 
stock (or bonds) is to be made on the following day before or 
at 2.15 o'clock. 



440^ SMITH'S FINANCIAL DICTIONARY. 

Rehabilitation. See Readjustment; also see Reorganiza- 
tion. 

Rehypothecation. The hypothecation again of collateral 
already hypothecated. Rehypothecation, except by consent of 
the owner of the collateral, is illegal. 

When a customer deposits with a broker securities instead 
of money as margin he hypothecates the securities with the 
broker. In effect he obtains a loan on them. The margin rep- 
resents the loan. He signs an agreement with the broker 
whereby the broker is permitted to rehypothecate the securi- 
ties — is permitted to use them as collateral in obtaining a loan 
for himself. If the broker defaults on the loan he has ob- 
tained on the securities and the securities are sold to satisfy 
the loan the owner of the securities (the broker's customer) 
cannot recover the securities. He is without recourse except 
that he may proceed against the broker to recover the differ- 
ence between the value of the securities and what he may owe 
the broker in margin or otherwise. 

Also, when stocks (or bonds) are bought on margin the 
broker's customer gives the broker the right to hypothecate 
them. This is necessary as the customer is the real owner of 
the securities — they are bought for his account and risk. 

Reichsbank. The name commonly used in referring to the 
Imperial Bank of Germany, which is the imperial bank or 
bank which receives holds and disburses the funds of the state 
(government). Translated Reichsbank is Imperial Bank. 

Reichsmark. An old name for mark; translated reichs- 
mark is imperial mark. Exchange on Germany is still quoted 
in reichsmarks. 

Reimbursement credit. This is a form of credit that figures 
in dealings in both domestic and foreign exchange. 

If a seller of goods in Boston to a buyer in Chicago desires 
to receive his pay for them in New York the buyer in Chicago 
establishes a credit in New York which the seller in Boston 
may draw against. Subsequently the one with whom the 
credit is established in New York draws upon the buyer in 
Chicago or else the buyer in Chicago makes a remittance for 
the amount which the Boston seller draws for. If a seller of 
goods in China to a buyer in New York desires to receive his 



'SMITH'S FINANCIAL DICTIONARY. 441 

pay in London the process is the same as in the case of the 
seller in Boston to the buyer in Chicago. 

Reinvestment. The using of interest and dividends to 
make new purchases of securities. 

Reissuable notfes. Money in the form of notes which after 
being paid may again be put in circulation. United States 
notes (greenbacks) and national bank notes are the only re- 
issuable notes. 

Released indorsed bond. Any indorsement on a coupon 
bond stating that it has been deposited as security for bank 
circulation (bank notes) or for insurance requirement may 
be released by an acknowledgment of the release before a no- 
tary public ; it will then be a delivery in accordance with New 
York Stock Exchange rules as a released indorsed bond. 

Sometimes the owner of a coupon bond inscribes the fact of 
his ownership on the bond, as, for instance, "This bond is the 
property of John Jones." In such a case in making a change 
in the ownership of the bond a formal assignment of it in blank 
must be executed by the owner and it then may be sold under 
the New York Stock Exchange rules specifically as a released 
indorsed bond. 

Remargining. In a speculative transaction this term means 
replenishing margin which has been partly or wholly ex- 
hausted by an adverse movement in prices. 

Remargining a loan. Same as replenishing a loan ; provid- 
ing additional collateral. For additional information see Col- 
lateral loan. 

Remittance. Money (or its representative, as a bill of ex- 
change or draft or other order for money) forwarded from one 
place to another is a remittance ; also, the act of forwarding it 
is remittance. 

Remitter. The person who forwards a bill of exchange 
(draft) or other order for money to a person in another place. 

Remonetize. To reinstate as lawful money. 

Renewal. When a loan of money becomes due and it is con- 
tinued for another period that is a renewal of the loan. When 
a stock that has been borrowed is called (its return demanded) 
and it is re-borrowed from the same or from another lender that 
is a renewal of a stock loan. 



442 SMITH'S FINANCIAL DICTIONARY. 

Rentes. The government bonds of France. The bonds of 
some other European governments also bear the same name. 

Renunciation form. English name for the form (blank) 
signed by a shareholder (stockholder) when he transfers 
(sells) his right to participate in a privilege accorded by a 
company, as, for instance, the right to subscribe for new stock 
to be issued by the company. 

Renunciationi of right. London Stock Exchange term for 
the transfer (sale) of a right accorded to a shareholder (stock- 
holder) in a 'company, as, for instance, the right to subscribe 
for new stock to be issued by the company. 

Reorganization. When the financial reconstruction or re- 
habilitation of a railroad or other corporation is voluntary — 
that is, by concurrence of the security-holders — the term re- 
adjustment applies. When the financial reconstruction is com- 
pulsory — that is, when it is effected by a receivership and fore- 
closure — the term reorganization applies. Most reconstruc- 
tions are compulsory; they seldom can be effected except by 
legal process following insolvency. 

The method of reorganization is ordinarily as follows: 
After default has been made in interest on bonds, say the first 
mortgage bonds, a receiver is appointed, after which a plan of 
reorganization is formulated. Provision usually is made in the 
plan whereby the first mortgage bonds, together with the ac- 
cumulated unpaid interest, are to be paid in full. Such holders 
as may desire to do so take for their bonds bonds of a newly 
formed company, with perhaps stock for the unpaid interest. 
Such holders as prefer cash for their bonds and unpaid interest 
are paid in cash. It sometimes is the case that the holders of 
bonds who take bonds of the new company for their old bonds 
receive the unpaid interest in cash. 

The money to pay those bondholders who prefer cash (and 
to pay unpaid interest if it is to be paid in cash) and to provide 
other needed funds and working capital is raised by levying 
an assessment on the stock (on the holders of the stock at so 
much per share). Then, an order for a sale of the property 
under foreclosure is obtained from the court (the property be- 
ing under the control of the court after the appointment by 
it of a receiver). 

The sale wipes out the bonds and the stock. The proceeds 



SMITH'S FINANCIAL DICTIONARY. 443 

of the sale, however, must go toward the liquidation of the 
mortgage debt. The property (generally) is bid in by a com- 
mittee of the bondholders for the benefit of the bondholders. 
The reorganization plan (generally) is primarily in the interest 
of the bondholders and only secondarily in the interest of the 
stockholders. 

After the formulation of the reorganization plan and pre- 
vious to the sale of the property an underwriting syndicate is 
formed which agrees to take, pay for and make exchange 
of the bonds the holders of which prefer cash and to pay the 
assessment on stock the holders of which decline to pay the 
assessment. The syndicate receives new stock for the old 
stock on which it pays the assessment, which old stock the 
holders who do not pay the assessment lose entirely by reason 
of its being wiped out by the sale under foreclosure. The 
syndicate (generally) receives a commission (in new securities 
or cash or both) on the whole issue of new bonds and the 
whole issue of new stock for guaranteeing the reorganization 
plan — for agreeing to pay for and exchange for new bonds 
such old bonds as are not exchanged by the holders and for 
guaranteeing to pay the assessment on stock the holders of 
which decline to pay it. As a rule an underwriting syndicate 
has to pay for few bonds, the holders preferring to exchange, 
or in other words, convert them into new bonds; likewise, 
the syndicate as a rule has to pay the assessment on no 
large proportion of the stock, the holders, for the most part, 
preferring to pay it. New securities (either bonds or stock) 
are customarily given for the assessment on the stock (as a 
compensation for the assessment money paid). 

Sometimes there is an assessment on the bonds, as when the 
property is not worth the amount of the bonds ; sometimes, 
also, new bonds for a less amount are given in exchange for 
the old bonds ; and usually the interest on the new bonds is at 
a lower rate than the interest on the old bonds. Second mort- 
gage bonds or other bonds subsequent in lien to the first 
mortgage bonds are usually subjected to assessment; new 
securities are almost invariably given as compensation for the 
assessment. 

Also see Readjustment. 

Replenishing a loan. Same as remargining a loan ; provid- 



444 SMITH'S FINANCIAL DICTIONARY. 

ing additional collateral. For additional information see Col- 
lateral loan. 

Replevin. Replevin is a provisional remedy by which prop- 
erty claimed is taken, pending- decision as to its ownership, 
into the custody of the law in order to prevent its being dis- 
posed of or secreted by the defendant. The plaintiff is re- 
quired to give a bond to indemnify the defendant for any loss 
or damage sustained in case possession of the property is 
awarded to the defendant. 

Report. The name is given to a memorandum furnished by 
a broker to his customer containing information that the cus- 
tomer's order has been executed, with details as to price, etc. 

On the Paris Bourse the word report means the same as 
contango in London or the same as interest or carrying charge 
in New York. 

Representative money. Representative money is anything 
promising to pay money which circulates as a medium of ex- 
change. It is usually made of paper, but sometimes of a cheap 
metal. In the case of paper money the promise to pay is 
printed on it ; in the case of metal money the promise to pay 
is expressed in the laws. 

Repudiation. The rejection, in whole or in part, of a con- 
tract, debt or obligation. The term applies in particular to 
the rejection or mandatory scaling of its debt by a govern- 
ment. 

The word repudiation as applied to the rejection of a debt 
by a state was first used in 1841 when the state of Mississippi 
repudiated bonds issued to railroad companies which failed to 
comply with conditions on which they received them. 

Requiremenits for listing. A circular furnished by the New 
York Stock Exchange containing the requirements that must 
be complied with to gain for an issue of stock or bonds ad- 
mission to dealings at the exchange. For additional informa- 
tion see Admission to dealings at the New York Stock Ex- 
change. 

Reserve. See Bank reserve. 

Reserve agent. A national bank in which another national 
bank keeps part of its legal reserve; the first bank is the re- 
serve agent of the second bank. For additional information 
see Bank reserve. 



SMITH'S FINANCIAL DICTIONARY. 445 

Reserve cities. The places in which national banks are situ- 
ated are divided into three classes — places that are not reserve 
cities, reserve cities and central reserve cities. Places that are 
not reserve cities comprise the greater number of places, na- 
tional banks in which are required to maintain a reserve of 
(keep on hand) 15 per cent of the amount on deposit with 
them, three-fifths of which reserve, however, may be de- 
posited by them with banks in reserve or central reserve cities. 
Reserve cities are places of more importance, at least as finan- 
cial centres, than the places which are not reserve cities. Na- 
tional banks in reserve cities must maintain a reserve of 25 
per cent of their deposits, one-half of which may be deposited 
in banks in central reserve cities. Central reserve cities are the 
chief financial centres, of which New York is foremost. Na- 
tional banks in reserve cities must maintain a reserve of 25 
cent in their own vaults. 

Reserve cities are Albany, Baltimore, Boston, Brooklyn, 
Cincinnati, Cleveland, Columbus, Denver, Des Moines, De- 
troit, Houston, Indianapolis, Kansas City, Kan., Kansas City, 
Mo., Lincoln, Los Angeles, Louisville, Milwaukee, Minne- 
apolis, New Orleans, Omaha, Philadelphia, Pittsburg, Port- 
land, Ore., St. Joseph, St. Paul, San Francisco, Savannah, 
Washington. 

Central reserve cities are Chicago, New York, St. Louis. 

Banks in places which are not reserve cities are unofficially 
designated as country banks. 

Reserve liability on bank shares. Practically all banks in 
Great Britain have a large amount of capital only callable — 
that is, subject to demand upon the holders of shares (of stock) 
— in case of disaster. The purpose of the reserve liability is 
to afford security to depositors. 

Resources. The aggregate of available property; the op- 
posite of liabilities. In business resources include cash on 
hand, merchandise, bills receivable, etc. 

Respondentia. A loan of money on the cargo of a vessel 
which the borrower undertakes to repay with interest, pro- 
vided the cargo arrives in safety at the port of destination; 
the contract or instrument for borrowing on a vessel's cargo 
is likewise called respondentia. 

Rest. See Bank of England rest. 



446 SMITH'S FINANCML DICTIONARY. 

Restrictive indorsement. An indorsement so worded as to 
restrict the further negotiability of the instrument. The words 
"For collection" written on a promissory note render the in- 
strument restrictive. The indorser in such a case may hold 
that he is not the owner of the note and did not mean to give 
title to it or to its proceeds when collected ; such an indorse- 
ment merely makes the indorsee agent for the indorser in 
collecting the note. 

Resumption act of 1875. A bill enacted into law January 
y, 1875, which provided for the resumption of specie payments 
by the government on January i, 1879. 

When the day appointed for resumption arrived the Treas- 
ury held more than $114,000,000 in gold in excess of outstand- 
ing gold certificates and the premium on gold in the market 
had disappeared. In fact greenbacks (paper money) were at 
par on December 17, 1878. The Gold Room in New York, 
where speculative operations in gold had been carried on, 
closed the following day and never reopened. No gold was 
withdrawn from the Treasury on resumption and only $11,- 
000,000 was withdrawn during the year. 

Resumption of specie payments. See Resumption act of 

1875- 

Retail. Goods sold at retail are goods sold in small quan- 
tity. 

Return. The term return is used as a synonym for report, 
as, for instance, the return of earnings of a railroad or in- 
dustrial company. 

The term return is also used as a synonym for statement, 
as the return (statement) of the financial condition of a bank 
or other corporation. 

The term return is also used to signify the yield of securities 
(stocks and bonds) in dividends or interest. See Income 
basis. 

The term return as used at the Banker's Clearing- House in 
London means an article (check, or draft or other paper call- 
ing for payment) which the bank to which it was presented 
for payment returned because there were not funds to meet it 
or because it was not properly indorsed or for some other 
reason. 

Also see Bank of England return. 



SMITH'S FINANCIAL DICTIONARY. 447 

Revenue account. Same as income account ; see Income ac- 
count. 

Ribs. See Short ribs. 

Rig. On the London Stock Exchange there is said to be a 
rig in a stock when a set of speculators have combined to buy 
up the available supply so as to make the stock scarce with 
the purpose of effecting a rise in the price of it. The corre- 
sponding term on the New York Stock Exchange is corner; 
see Corner. 

Rigging the market. A Wall Street term ; manipulating the 
market. 

Right. As a financial term the word means the right or 
privilege to subscribe for a stock or bond. 

When a company proposes to increase its capital stock it 
is the custom for it to give its stockholders the right, in pref- 
erence to the general public, to subscribe for the new stock in 
amounts proportionate to their holdings of the old stock. 

An allotment or accepted subscription in an underwriting is 
a right. 

Ring. The term ring applies to a group of capitalists (or 
speculators) who are joined together in a transaction or deal ; 
specifically, it applies to a combination of persons as distin- 
guished from a combination of concerns or interests. 

For instance, ring applies to a clique or coterie of persons 
who are striving, by previous arrangement among themselves, 
for the same end, but each for his own account, as a ring in a 
stock, the persons in which are endeavoring to advance the 
stock by buying simultaneously or to depress it by selling 
simultaneously, but each for himself. When they act collec- 
tively for their united risk and benefit the term pool applies ; 
see Pool. 

The term ring is sometimes applied to a combination of 
separate concerns or interests by an understanding or by a 
compact (as a pool), but not by an actual consolidation. In 
such a case the term combination or combine should be em- 
ployed. To an actual consolidation, when the purpose is to 
control a particular industry or business the term trust prop- 
erly applies. 

Combine is a newer term than either ring or trust and has 
been rather loosely used. 



44S SMITH'S FINANCIAL DICTIONARY. 

In Great Britain the term ring is applied to a group or syn- 
dicate of firms or individuals formed to work a certain indus- 
try together and prevent competition. A shipping ring is a 
ring of shipowners. (Much the same as an American com- 
bine). 

Ringing out. This is an operation by which a transaction 
in a future in grain, cotton, coffee or other commodity may be 
concluded before the maturity of the contract. 

Illustration : A sells to B for delivery in some stipulated 
month in the future. B sells to C, C sells to D and D sells 
to A. Thus a ring is formed. Each has bought and sold and 
no actual delivery is required. 

In a transaction in a future each party to it (the buyer as 
well as the seller) deposits a margin with a designated de- 
pository as security for the performance of his part of the 
contract. When the ring is complete a common settling price 
is fixed by the proper authority of the exchange on which the 
transaction took place. 

Say A sold at 12 and bought back at 10 1-2 — the difference is 
I 1-2 in his favor. The settling price is 11, say. Since A sold 
to B at 12 he collects the difference between 12 and 11, which 
is I, from B. Then, since he bought from D at 10 1-2 he col- 
lects the difference between 10 1-2 and 11, which is 1-2, from 
D. Thus, between B and D he collects his total difference. 
But suppose A had sold at 10 1-2 and bought back at 12. 
Then, he would pay B 1-2 and pay D i. 

Contracts in stocks w. i. (when issued — see When issued) 
are also ringed out in the same manner as contracts in futures 
in grain, cotton, coffee, etc. 

Ring settlement. The settlement of contracts in which a 
ring has been formed. See Ringing out. 

Rising averages. The weekly statement of the associated 
banks of New York gives the average deposits, loans, cash 
holdings, etc., of the banks for the week. When these items 
are increasing in amount the bank statement is said to be 
made up on rising averages. The opposite of rising averages 
is falling averages. For additional information see Bank state- 
ment. 

Rising exchange. If foreign exchange is quoted in the 



SMITH'S FINANCIAL DICTIONARY. 449 

money of the country where issued a rising rate for it signifies 
that the exchange situation is against the country where the 
exchange is issued and in favor of the country where it is pay- 
able. In other words, exchange is more costly — the money of 
the country where the exchange is payable costs more in the 
money of the country where the exchange is issued. For in- 
stance, exchange on London is quoted in New York in dollars 
(and cents) and when the rate is rising the pound sterling 
costs more in dollars (and cents). 

If foreign exchange is quoted in the money of the country 
where it is payable a rising rate for it signifies that the ex- 
change situation is in favor of the country where the exchange 
is issued and against the country where it is payable. In 
other words, exchange is less costly — more in the money of 
the country where the exchange is payable is obtainable in 
the money of the country where the exchange is issued. For 
instance, exchange on Faris is quoted in New York in francs 
and when the rate is rising more in francs (and centimes) can 
be obtained for the dollar. 

The opposite of rising exchange is falling exchange ; see 
Falling exchange . 

Rolling stock. The rolling stock of a railroad consists of 
its cars and locomotives. 

Roman numerals. I, V. X, L, C, D, M — in their order, i, 5, 
10, 50, 100, 500, 1,000. 

Rooni trader. One who is a member of an exchange and 
speculates in the room (on the floor of the exchange) for his 
own account. 

When a room trader on the New York Stock Exchange pur- 
chases a stock he tries at once or as soon as possible to sell it 
at a profit. Likewise, when he sells a stock short (sells stock 
which he does not own) he tries at once or as soon as possible 
to buy it back at a profit. He is not ready, as is the London 
jobber, to either buy or sell at prices named by himself, but 
he bids for (offers to buy) or offers (offers to sell) stock ac- 
cordingly as he thinks he may be able to make a profit by 
probable subsequent changes in the price. It is his purpose 
each day if practicable to even up — to sell as many stocks as 
he has bought or to buy as many stocks as he has sold. 

The member of the London Stock Exchange who corre- 



450 SMITH'S FINANCIAL DICTIONARY. 

spends in a measure to the room trader on the New York Stock 
Exchange is the jobber. The London jobber is not a broker. 
He deals wholly for himself. He is practically a wholesale 
dealer in securities, buying as well as selling. He will either 
buy or sell at prices named by himself. The jobber does not 
deal with the outsider (the speculator who is not a member of 
the exchange). The broker receives the order from the out- 
sider and in executing it deals with the jobber. The broker 
goes to the jobber and without saying whether he wishes to buy 
or sell asks the jobber to "make a price." The jobber names 
two prices, for instance, 99 3-8 and 99 5-8, meaning that he 
will buy at the lower price or will sell at the higher price. The 
jobber expects to undo or cover the bargain (transaction) by 
a fresh transaction with another jobber or broker whereby he 
will sell stock that he has bought or will buy stock that he has 
sold. 

Round lot. In stocks a large even number of shares bought 
or sold in one lot, as 1,000, 5,000, 10,000. 

Round transaction. A round transaction is a transaction 
made and closed — that is, first buying and then selling, or the 
reverse, first selling and then buying. 

Royal Exchange. The exchange in London where dealings 
in foreign exchange are carried on. 

Rule. The rule, in financial or commercial matters, means 
the usage or practise. 

Under the rule is a New York Stock Exchange term ; see 
Under the rule. 

For requirements as to stock certificates and bonds see 
Rules for delivery. 

Rules for delivery. The following rules for delivery are 
those of the New York Stock Exchange and they apply in a 
general way in transactions in securities elsewhere than on 
the exchange : 

I. Securities admitted to dealings upon the New York Stock Ex- 
change, registered and transferable in the Borough of Manhattan, city of 
New York, in conformity with the requirements of Section i, Art. XXXIII 
of the Constitution, are a delivery : 

(a) Certificates of stock for 100 shares or odd lots aggregating 100 
shares, with irrevocable assignment for each certificate, and in 
the name of a member or his firm, registered and doing busi- 
ness in the Borough of Manhattan. Certificates for the exact 
amount or aggregating the amount of an odd lot. 



SMITH'S FINANCIAL DICTIONARY. 451 

(b) Or, with irrevocable assignment witnessed by or correctness of 

signature guaranteed by such member or his firm. 

(c) Or, with irrevocable assignment and power of substitution and a 

separate guarantee by such member or his firm for each power 
of substitution. 

(d) Coupon bonds payable to bearer in denominations of $500 or 

$1,000 each, with proper coupons of the bond's number securely 
attached. Small bonds (under $500) only in special transac- 
tions. 
The money value of a missing coupon may be substituted only 
with the consent of the committee on securities for each de- 
livery. 

(e) Registerable coupon bonds in denominations of $500 or $1,000 

registered to bearer, or when transfer books are closed with an 
assignment to bearer for each bond by a member or his firm or 
witnessed by a , member or the correctness of the signature 
guaranteed by a member or his firm, registered and doing busi- 
ness in the Borough of Manhattan, 
(^f) Registered bonds in denominations not exceeding $10,000 prop- 
erly assigned. 

2. Securities contracted for in amounts exceeding 100 shares of stock 
or $10,000 in bonds may be tendered in lots of 100 shares of stock or $10,000 
in bonds, or any multiple of either, and must be accepted and paid for as 
delivered- 

3. Securities with assignment or power of substitution signed by an 
insolvent are not a delivery. During the close of transfer books such 
securities held by others than the insolvent are a delivery if accompanied 
by an affidavit for each certificate or bond that said securities were held on 
a date prior to the insolvency. 

Securities with assignment or with power of substitution guaranteed 
by a member or his firm suspended for insolvency are not a delivery and 
must be reguaranteed by a solvent member or his firm. 

4. Securities in the name of a deceased person or a firm that has 
ceased to exist are not a delivery except during the closing of the transfer 
books. The assignment must be proved or acknowledged before a notary 
public. (Form No. 3; for witness Nos. 10 and 11). 

Securities with either the assignment or any power of substitution 
witnessed by a deceased person are not a delivery. 

5. Securities assigned or a power of substitution by a firm that has 
dissolved and is succeeded by one of the same name are a delivery when 
the new firm shall have signed the statement "Execution guaranteed," under 
a date subsequent to the formation of the new firm. 

6. Securities in the name of a corporation or an institution or in a 
name with official designation are not a delivery unless assignment is sworn 
to before a notary public. The notary public must also make a deposition 
that he has seen the minutes of the institution authorizing the person or 
persons signing to make the assignment. (Forms Nos. 8 and 9). A cer- 
tified copy of the resolutions of the proper authorities of the company in 



SMITH'S FINANCIAL DICTIONARY, 



whose name the security stands, authorizing the assignment and giving 
date of adoption, must accompany the security. 

7. Securities with an assignment or a power of substitution signed by 
trustees, guardians, infants, executors, administrators, agents or attorneys 
are not a delivery. 

8. Securities assigned by a married woman are not a deHvery. A 
joint assignment and acknowledgment by husband and wife before a notary 
public will make such security a delivery only while the transfer books are 
closed. (Form No. 4). 

9. Securities in the name of an unmarried woman with the prefix 
"Miss" are a delivery without notarial acknowledgment when signed "Miss." 

10. Securities in the name of an unmarried woman without the pre- 
fix "Miss", or a widow, are a delivery only when the assignment is ac- 
knowledged before a notary public. (Form No. 5). 

11. In the case of securities of a company whose transfer books are 
closed indefinitely for any reason, legal or otherwise, the assignment and 
each power of substitution must be acknowledged before a notary public. 
(Forms Nos. 2 and 3; for witness Nos. 10 and 11). 

12. Securities in the name of foreign residents are not a delivery on 
the day the transfer books are closed for payment of a dividend or regis- 
tered interest and reclamation can only be made on that day. 

13. Securities in the name of foreign residents must be accompanied 
by an acknowledgment before a United States consul or J. S. Morgan & 
Co., London, when required by transfer agents. 

Several companies having transfer offices at the Grand Central Station, 
New York, make this requirement. 

14. A certificate of stock on which the name of a transferee has been 
filled in in error may be made a delivery during the closing of the transfer 
books by ruling of the committee on securities. Necessary form of release, 
cancellation and reassignment will be furnished on application to the com- 
mittee on securities. 

15. An indorsement by a member or his firm, registered and doing 
business in the Borough of Manhattan, or the signature as a witness by 
such a member of a signature to an assignment or a power of substitution is 
a guarantee of its correctness. Each power of substitution, as well as the 
assignment, must be so guaranteed or witnessed. 

16. The receiver of stock may demand delivery by transfer when the 
transfer books are open and must give ample time in which to make trans- 
fer. The seller may demand payment for the securities at the time and 
place of transfer. The seller may make delivery by transfer when personal 
liability attaches to ownership. 

17. When a claim is made for a dividend on stock after the transfer 
books have been closed the party in whose name the stock stands may re- 
quire from the claimant presentation of the certificate, a written statement 
that he was the holder of the stock at the time of the closing of the books, a 
guarantee against any future demand for the same, and the privilege to 
record on the certificate evidence of the payment by cash or due bill. 

18. "Coupon bonds issued to bearer, having an indorsement upon them 



SMITH'S FINANCIAL DICTIONARY. 453 

not properly pertaining to them as a security, must be sold specifically as 'in- 
dorsed bonds,' and are not a delivery, except as 'indorsed bonds.' " Ex- 
tract from resolutions of governing committee, adopted May 23, 1883. 

A definite name of a person, firm, corporation, an association, etc., such 
as "John Smith," "Brown, Jones & Co.," "Consolidated Bank" appearing 
upon a coupon bond and not placed there for any purpose of the company by 
any of its officers implies ownership and is an "indorsed bond" under the 
above resolution. 

19. Any indorsement on a coupon bond stating that it has been de- 
posited with a state for bank circulation or insurance requirement may be 
released and release acknowledged before a notary public; it will then be a 
delivery as a "released indorsed bond." 

"rights'"'' to subscribe. 

20. Assignments of "rights," with the signature of the assignor wit- 
nessed and guaranteed in the same manner as other assignments as pro- 
vided in these rules, are a delivery: 

(a) An assignment of the "rights" accruing on each 100 shares or 

assignments of "rights" on odd lots aggregating the "rights" on 
100 shares. 

(b) An assignment for the exact amount or assignments aggregating 

the amount on a sale of the "rights" accruing on an odd lot of 
stock. 

21. Assignments of "rights" in the name of a married woman, widow 
or an unmarried woman are a delivery without notarial acknowledgment. 

22. Assignments of "rights" made by a deceased person or a firm that 
has ceased to exist are not a delivery and must be taken back by the party 
delivering them. 

23. Assignments of "rights" signed by trustees, etc., or for corpora- 
tions, etc., are not a delivery until passed by the committee on securities. 

24. Assignments of "rights," except those sold specifically for "cash," 
can be delivered or demanded only on the date fixed for delivery by the 
committee on securities. 

25. Due bills for assignment of "rights" on borrowed stock must be 
redeemed on the date fixed for the delivery of assignments of "rights." 

26. Due bills for "rights" accompanying stock which by ruling of the 
committee on securities does not sell "ex-rights" at the closing of the 
books must be redeemed on the specific date fixed by the committee on 
securities. 

27. Due bills for "rights" or an assignment of "rights" for all accrued 
"rights" must accompany securities delivered on a time contract. 

When the right to subscribe terminates before the maturity of a time 
contract special ruling will be made by the committee on securities. 

28. If default is made "rights" may be bought or sold for the account 
of the party in default at the place in the exchange where "rights" are 
traded in. 

RECLAMATIONS. 

29. Reclamations for irregularity in securities must be made within 
ten days from the date of delivery. (Article XXIX, Constitution). Claim^ 



454 SMITH'S FINANCIAL DICTIONARY. 

must be made before 2.15 p. m. An irregular security having been de- 
livered may be returned to the party who delivered it, who must imme- 
diately give the party presenting it either the security in proper form for 
delivery or pay the market price of the security and assume all liability for 
non-delivery. In the latter case the security in proper form may be de- 
livered to the claimant before 2.15 p. m. and the amount paid shall be re- 
turned. 

SIGNATURES TO ASSIGNMENTS. 

30. The signature to an assignment or a power of substitution must 
be technically correct, i. e., it must correspond in every particular, without 
any change, with the name in which the security is issued, and the name of 
the attorney or substitute. 

The date of an assignment or a power of substitution must be legible 
and any correction properly noted by the signer. 

(a) Titles must be prefixed or affixed to signatures exactly as they 

are in the name in which the security is issued. 

(b) "Brothers" or "Bros." must be written as it appears in the secu- 

rity. 

(c) "And" or "&," "Company" or "Co." may be written either way. 

(d) "Mr,," "Mrs.," "Esq." or the residence or business address of 

an individual or firm need not be made part of the signature. 
The committee recommends : That transfer agents be given the exact 
form of the name to which securities are to be transferred. That the sig- 
natures of all members and the firm signatures of each of the partners in a 
member's firm doing business in the Borough of Manhattan be filed with 
transfer offices in order to secure promptness of transfer of securities. 

ASSIGNMENTS AND NOTARIAL ACKNOWLEDGMENTS. 

A detached assignment of a security must contain provision for the 
appointment irrevocable of an attorney and substitute and a full description 
of the security, i. e., name of company, issue, certificate or bond number 
and amount (the latter written in words and numerals), and must be 
acknowledged before a notary public with seal and date. This description 
must be in the same handwriting as the other facts stated. A separate as- 
signment must accompany each certificate or bond. 

In the acknowledgment of an assignment or power of substitution in 
the name of an individual the notary public must certify with seal and date 
that he knows the person signing to be the person named in the security or 
in the power of substitution and that the signer acknowledged his signa- 
ture. (Form No. 2). 

In an assignment or power of substitution in the name of a firm the 
notary public must certify that he knows the person and knows him to be 
(or to have been on the date of execution) a member of the firm, and that 
he acknowledged that he executed the assignment or power of substitution 
as the act and deed of the firm. (Form No. 3)- 

In proving before a notary public an assignment or power of substitution 
the witness must make deposition that he knows the person who executed 
the assignment or power of substitution to be the person named in the 
security or assignment and saw the signer execute the same. For assign- 



SMITH'S FINANCIAL DICTIONARY. 455 

ments of securities in the name of a firm the witness must make deposition 
that he knows the party signing to be (or to have been at the date of ex- 
ecution) a member of the firm. (Forms Nos. lO and ii). 

Any akeration in the wording of an assignment must be stated over the 
signature of the party signing. 

Any akeration in a notary's acknowledgment must be noted by signa- 
ture of the notary. 

ASSIGNMENT — POWER OF SUBSTITUTION. 

Form No. i. — Form of assignment on a certificate of stock accepted by 
the committee on stock list : 

For value received hereby sell, assign and transfer unto 

shares of the capi- 
tal slock represented by the within certificates, and do hereby irrevocably 

constitute and appoint attorney to transfer the 

said stock on the books of the within named company with full power of 
substitution in the premises. 

Dated 19 



In presence of 



Power of substitution to be placed on the back of a certificate when 
name of attorney has been filled in with the name of an individual or a firm : 

I for we] hereby irrevocably constitute and appoint 

my [or our] substitute to transfer the within 

named stock under the foregoing power of attorney, with like power of 
substitution. 

Dated 19 



In the presence of 



FORMS FOR NOTARIAL ACKNOWLEDGMENTS AND DEPOSITIONS PRESCRIBED BY 
THE COMMITTEE ON SECURITIES. 

Form No. 2. — Acknowledgment by an individual by whom an assign- 
ment or a power of substitution is executed : 

State of ) 

)• ss. 
County of ) 

On this day of 19 ... . before me, 

a notary public for the county of personally 

appeared to me known, and known to me to 

be the individual named in the within certificate, and described in and who 
executed the foregoing instrument, and acknowledged to me that he ex- 
ecuted the same. 



[seal] 



If used for a power of substitution substitute for the word "instrument," 
"power of substitution, dated 19. . . .," the date re- 
ferred to filled in. 



456 SMITH'S FINANCIAL DICTIONARY. 

Form No. 5. — Acknowledgment for firm : 

State of ) 

[• ss. 
County of ) 

On this day of 19 before me, 

a notary public for the county of personally 

appeared to me known, and known to me to 

be one of the firm of named in the 

within certificate, and described in and who executed the foregoing instru- 
ment, and acknowledged to me that he executed the same as the act and 
deed of said firm. 



[seal] 



If used for a firm that has dissolved omit the word "be" in fourth line 
and substitute the words "have been on 19. , . ." 

If used for a power of substitution executed by a firm that has dis- 
solved, substitute for the word "instrument," "power of substitution, dated 
19 " the dates referred to filled in. 

Form No. 4. — Joint acknowledgment or execution of an assignment 
made by husband and wife : 

State of ) 

]-ss. 
County of ) 

On this day of 19 before 

me came and her husband, 

both of them known to me, and they severally acknowledged that they ex- 
ecuted the foregoing (or within) assignment and power of attorney for 
the purpose therein mentioned. 



[seal] 



Form No. 5. — Acknov/ledgment of an assignment executed by an un- 
married woman or a widow : 

State of ) 

[• .ss. 
County of ) 

On this day of 19 before 

me personally came to me known and known to me 

(or satisfactorily proven to me) to be an unmarried woman (or widow) 
and known to me to be the same person named in the within certificate of 
stock and described in and who executed the foregoing (or within) assign- 
ment and power of attorney, and acknowledged to me that she executed the 
same for the purpose named. 



[seal I 



Form No. 6. — Notarial acknowledgment for assignment or a power of 
substitution executed by a member suspended for insolvency : 



SMITH'S FINANCIAL DICTIONARY. 457 



State of ) 

Yss. 
County of ) 

On this day of 19 ... . before me, 

a notary public for the count}'- of personally 

appeared to me known, and known to me to 

be the individual named in the within certificate, a,nd described in and who 
executed the foregoing instrument, and acknowledged to me that he ex- 
ecuted the same on 19 



[seal] 



If used for a power of substitution substitute the words "power of sub- 
stitution dated 19. . . .," for the word "instrument." 

Form No. 7. — Notarial acknowledgment for assignment or a power of 
substitution executed by" a firm suspended for insolvency : 

State of J 

>■ ss. 

County of ) 

On this day of 19.... before me, 

a notary public for the county of , personally 

appeared to me known, and known to me to 

be one of the firm of named in the 

within certificate, and described in and who executed the foregoing instru- 
ment, and acknowledged to me that he executed the same on 

19. . . .as the act and deed of said firm. 



[seal] 



ss. 



If used for a firm that has dissolved substitute the words "have been" 
for the word "be" in fourth line. 

For a power of substitution, substitute the words "power of substitution 
dated 19. . . .," for the word "instrument." 

Form No. 8. — Deposition by an officer or officers executing assignment 
of or power of substitution on a security in the name of an association or 
a corporation : 
State of ) ' 

County of ) 

On this day of 19. . . .before me, a 

notary public for the county of personally came 

to me known, who being by me first duly sworn, did 

depose and say that he resides at that he is the 

of the corporation named in the 

within certificate, and described in and who executed the foregoing instru- 
ment ; that he is acquainted with the seal of said corporation, and that the 
seal affixed to such instrument is such seal, and was so affixed by authority 

of the board of of said corporation, and that by 

like authority he executed the same. 

And further, I have seen the minutes of the 

of the dated 19. . . ., authorizing 

the said to make this assignment. 

[seal] 



458 SMITH'S FINANCIAL DICTIONARY. 

If tne authorization to make assignment (or to sign the power of sub- 
stitution) requires the signature of more than one officer this deposition 
must be made to conform, the notary stating their respective names, that 

both are known to him, that they reside at. and 

respectively, that they are the and 

respectively, etc. 

Form No. p. — Deposition for an officer of an association or a corpo- 
ration when the security stands in his name with his title affixed : 

State of 



County of ) 

On this day of 19 before me, 

a notary public for the county of personally came 

to me known, who being by me first duly sworn, did depose 

and say that he resides at that he is the 

of the : that he is acquainted with the seal of 

said corporation, and that the seal affixed to the above instrument is such 

seal and was so affixed by the authority of the board of 

of said corporation, and that by like authority he executed the same. 

And further, I have seen the minutes of the 

of the dated 19. . . ., author- 
izing the said to make this transfer. 



[seal] 



Form No. 10. — Deposition by a witness of the execution of an assign- 
ment or a power of substitution by an individual : 

State of ) 

Yss. 
County of. ) 

On this day of 19. .. .before me, 

a notary public for the county of personally appeared 

to me known, who being by me first duly sworn 

did depose and say that he resides at that he knew 

named and described in the 

instrument, which was signed in witness's presence. 



[seal] 



If used for a power of substitution executed by an individual see in- 
struction in Form No. 2. 

Form No. 11. — Deposition by a witness of the execution of an assign- 
ment or a power of substitution by a firm : 

State of \ 

\ ss. 
County of ) 

On this day of 19. . . .before me, 

a notary public for the county of personally appeared 

to me known, who, being by me first duly sworn, did 

depose and say that he resides at that he knew 



SMITH'S FINANCIAL DICTIONARY. 459 



and knew him to be one of the firm of named 

and described in the instrument, which was signed in wit- 
ness's presence. 



[seal] 



If used for a firm that has dissolved or for a power of substitution 
executed by a firm that has dissolved see instructions in Form No. 3. 

Form No. 12. — Detached assignment and power of attorney for stocks 
or bonds : 

For value received have 

bargained, sold, assigned, and transferred, and by these presents do bar- 
gain, sell, assign and transfer unto shares of 

the capital stock (or one [i] bond) of the 

standing in name on 

the books of said represented by certificate 

(or bond for $ ) No 

herewith, and do hereby constitute and appoint 

true and lawful attorney, irrevocable for 

and in name and 

stead, but to use, to sell, assign, transfer and set 

over, all or any part of the said stock, and for that purpose to make and 
execute all necessary acts of assignment and transfer, and one or more 
persons to substitute with like full power, hereby ratifying and confirming 

all that said attorney or 

substitute or substitutes shall lawfully do by virtue hereof. 

Dated 19 

In presence of 



Form No 13. — Acknowledgment on a detached assignment made by an 
individual : 

State of ( 

\ ss. 
County of ( 

On this day of 19. . . .before 

me, a notary public for the county of personally came 

to me known to be the individual 

named in the annexed certificate of stock (or bond) and described in and 
who executed the foregoing instrument, and acknowledged to me that he 
executed the same. 



[seal] 



Form No. 14. — Acknowledgment on a detached assignment executed by 
a firm : 



State of. 



^ ss. 

County of ) 

On this day of 19.... before me, 

a notary public for the county of personally 

appeared to me known, and known to me to 



46o SMITH'S FINANCIAL DICTIONARY. 

be one of the firm of , named in the an- 
nexed certificate of stock (or bond) and described in and who executed 
the foregoing; instrument, and acknowledged that he executed the same as 
the act and deed of said firm. 

[seal] 

If used for a firm that has dissolved see instruction in Form No. 3. 

Runner. A messenger. 

Running account. Same as open or current account; a 
continuing account in which settlement is made at intervals, 
as every 30 days, 60 days or twelve months. 

Run off. This is a term used in the exchange business. 
When a banker has sold time bills of exchange (bills payable 
at a future time) and pays them at maturity (when due) in- 
stead of renewing (extending) them he is said to have let his 
bills run off (in contradistinction to letting them run on). 

Run on a bank. When the depositors in a bank become 
alarmed for the safety of their money and seek, en masse, to 
•draw it out of the bank there is said to be a run on the bank. 

Rupee paper. Securities of the government of India, in- 
terest and principal being payable in rupees in India and by 
b)ills of exchange on Calcutta in England. 

Also see India Council bill. 



S. As printed on the tape by the stock ticker this letter 
means south or southern or stock or series or seller (followed 
b)y a figure or figures for day or days) or shares. A transaction 
seller 4, 10, 20, 30 or 60 is recorded (printed) thus : RG. 75. 84 
(or 10, etc.), meaning that Reading stock was sold at 75 and 
that the seller may on one day's notice to the buyer deliver it at 
any time within 4 days (or 10 days, etc.) ; see Seller's option. 

Sack. The cotton sack in which flour is put up contains 140 
pounds. To convert sacks to barrels (196 pounds) multiply 
the number of sacks by 5 and divide by 7. 



SMITH'S FINANCIAL DICTIONARY. 461 

In Great Britain a sack contains 280 pounds. 

Safe deposit company. Practically a warehouse company; 
a company for the safe keeping of goods, securities and other 
valuables, which also rents safes on its premises and compart- 
ments in its vaults. 

The New York state banking law defines a safe deposit com- 
pany as a ''corporation formed for the purpose of taking and 
receiving upon deposit as bailee for safe keeping and storage 
jewelry, plate, money, specie, bullion, stocks, bonds, securities 
and valuable papers of any kind, and other valuable personal 
property, and guaranteeing their safety upon such terms and 
for such compensation as may be agreed upon by the company 
and the respective bailors thereof, and to rent vaults and safes 
and other receptacles for the purpose of such safe keeping and 
storage." 

Safety-fund system. The safety-fund system, so called, was 
adopted in Ncav York state in 1829. The banks were required 
to establish a common fund for the security of the holders of 
their notes (and at first for their depositors as well) by a tax 
of 1-2 of I per cent annually upon the capital stock of the banks 
until the fund amounted to 3 per cent of the capital. Any 
encroachments on the fund were to be made good by further 
taxes at the same rate. 

From 1829 to 1841 no demands were made on the fund, but a 
series of bank failures in 1841 and 1842 developed the fact that 
the law, apparently by oversight, made the safety fund respon- 
sible, not only for circulation, but for all the debts of the insol- 
vent banks. This discovery resulted in the exhaustion of the 
fund, although it was more than sufficient in amount to have 
redeemed the notes of the failed banks. The law was 
amended, but the damage to the fund had been done, and in 
the period while the deficit was being made good and a new 
fund accumulated by the annual tax of 1-2 of i per cent there 
was no security for the payment of notes except the credit of 
the issuing banks. 

The safety fund system was not terminated until 1866 when 
the charters of all the banks operating under it expired. The 
surplus left was then turned into the state treasury. In so far 
as the system fell short of absolute success the fault seems to 
have been due to unsuspected defects in the letter of the law 



462 SMITH'S FINANCIAL DICTIONARY. 

rather than to any weakness in the principle on which it was 
based. 

Sales. In transactions in stocks, grain, cotton, coffee and 
other things dealt in on exchanges the term purchases is not 
used ; the term sales is used instead. Whether in an advancing 
market, when the general desire is to purchase, or in a declin- 
ing market, when the general desire is to sell, the custom is to 
say sales amounted to or were so much and not to say pur- 
chases amounted to or were so much. 

Sales account. The correct term is account sales ; see Ac- 
count sales. 

Sales bill. This term is sometimes applied to a bill of ex- 
change (draft) drawn against goods sold, or rather, drawn on 
the buyer of the goods. A better term is commercial bill. 
For additional information see Domestic exchange ; also see 
Foreign exchange. 

The term sales bill is also sometimes used in the sense of 
account sales ; see Account sales. 

Sales list. See Stock lists. 

Salting. A colloquialism, meaning to place valuable ore in 
a worthless mine to deceive a possible purchaser. 

Sample crowd. A term applied to brokers who deal in car- 
lots of grain or flour, basing their dealings on exhibits of 
samples in the board room (on the floor of an exchange). 

Sample broker. One who deals in car-lots of grain or flour 
by means of samples. 

Sans recours. Without recourse ; see Without recourse. 

Satisfaction piece. A formal acknowledgment in writing by 
one who has received payment in discharge or acquittance or 
release of a mortgage or judgment. A satisfaction piece in- 
cludes authority for its entry on the record. 

Satisfied. A judgment or a debt is satisfied when it is paid. 

Savings bank. A bank of deposit the depositors in which 
have a mutual interest in the profits of the institution ; in other 
words, an institution for receiving and investing savings, 
which pays interest on deposits at stated intervals, the interest 
depending as to rate on the bank's profit from investing the de- 
posits. 

The banking law of New York defines a savings bank as "a 
corporation duly authorized by the laws of this state to receive 



SMITH'S FINANCIAL DICTIONARY. 463 

money on deposit and pay such rates thereon, and to invest 
the same in such securities and obHgations as may be pre- 
scribed by law." 

A mutual savings bank is one conducted wholly for the bene- 
fit of the depositors, who receive in the form of interest all 
profits over and above necessary expenses and a moderate part 
•of the profits set aside in a surplus fund to provide for unex- 
pected losses or contingencies. 

A stock savings bank is one organized with a capital stock 
and the stockholders receive in dividends the profits over and 
above the interest paid on deposits. 

A savings bank in New York state is not required to keep a 
reserve, the object of a savings bank being profitably to employ 
as fully as possible the funds entrusted to it. It may, however, 
keep on hand a fund not exceeding 10 per cent of its deposits. 
A savings bank is subject to many restrictions as to the char- 
acter of its investments and the collateral on which it may loan. 

Sawdust game. The term applied to the swindle which 
consists of the pretended sale of counterfeit money and the 
delivery to the buyer of a package containing sawdust (or 
some other worthless article, as paper). This particular form 
of swindling is also called the bunco game. 

SB. As printed on the tape by the stock ticker these letters 
mean small bonds ; see Small bond. 

SC. As printed on the tape by the stock ticker these letters 
mean scrip ; see Scrip. 

Scaling down. Cutting down or reducing proportionately 
or on a scale, as scaling down interest. 

If a company has two or more issues of bonds not bearing 
the same rate of interest and in a reorganization of the com- 
pany or a refunding of its bonds the rates of interest on the 
bonds are reduced proportionately the operation of reducing 
the interest is called scaling down the interest. The term scal- 
ing doAvn does not apply when there is only one issue of bonds 
upon which the rate of interest is to be reduced, unless the rate 
of interest on this issue is to be reduced a certain amount at the 
end of each successive specified period. If the rate of interest 
on a single issue of bonds is simply made lower without provi- 
sion for a further lowering the operation is described as re- 
ducing or cutting down the interest. 



464 SMITH'S FINANCIAL DICTIONARY. 

If a company which has two or more classes of stock lowers 
the dividends on them proportionately the operation is de- 
scribed as scaling down dividends. 

Scalp. A speculative colloquialism, meaning a small profit 
taken quickly. 

Scalper. An appellation for a speculator who seeks small, 
quick profits. A scalper is generally a member of an exchange 
who trades for his own account and has not to pay commis- 
sions. 

Scalping. Speculating for quick, small profits. 

Scandinavian Union, The. A monetary union formed by the 
adoption of the same currency system by Denmark, Norway 
and Sweden. See Moneys of the world. 

Scratcher. In bookkeeping a colloquial name for a day- 
book. 

Scrip. Usually the term is applied to a certificate for a frac- 
tion of a share of stock and usually, also, scrip is convertible 
into shares when presented in amounts equal to the face value 
of a full share. It has no voting or dividend rights until con- 
verted into full shares of stock, although sometimes interest is 
paid on it. 

Scrip was also the name given to United States paper cur- 
rency of denominations less than $i which is no longer issued ; 
such money was commonly called shinplasters. 

In Great Britain it is the practise to issue scrip to represent 
instalments paid on subscriptions for stock; when all instal- 
ments are paid the scrip is exchanged for stock certificates. 

Scrip dividend. One payable in scrip, or in other words, a 
due bill, sometimes bearing interest at the legal rate and 
usually convertible into stock, but having no voting power and 
entitled to no dividend until so converted. 

Scrivener. Former name for a notary public or public 
writer ; also, money scrivener was a former name for a money 
changer. 

Sea island cotton. Cotton grown on the islands off the 
coasts of Florida, Georgia, South Carolina and Texas. 

Sea room. Same as ocean room ; freight accommodation on 
an ocean vessel. 

Seasoned securities. Those which have long been on the 
market and have something like an established value. 



SMITH'S FINANCIAL DICTIONARY. ' 465 

Seat. A designation for a membership in an exchange. 

Secondarily liable. The person primarily liable on a nego- 
tiable instrument is the person upon whom rests the absolute 
requirement to pay it; all other parties are secondarily liable. 

The maker of a note is primarily liable, while an indorser is 
secondarily liable. When a draft has been accepted the ac- 
ceptor is primarily liable, while the drawer is secondarily liable. 
When, however, a draft has not been accepted the drawer is 
primarily liable. The drawer (issuer) of a check is primarily 
liable, while an indorser is secondarily liable. An indorser is 
always secondarily liable. 

Secondary creditor. A creditor whose claim is second in 
priority of lien. 

Second board. On exchanges where there are calls of stocks 
and bonds or calls of grain, cotton, etc., the second call is often 
designated as the second board. Also, the second printed list 
of sales on the New York Stock Exchange, covering the period 
from 12 noon to 2 p. m., is called the second board. 

Second hands. Goods are said to be in second hands when 
they have passed from the hands of manufacturers or im- 
porters into the next succeeding hands, as into the hands of 
jobbers or wholesalers. 

Second mortgage. The mortgage that is a lien after the 
first mortgage. 

Second mortgage bond. A bond issued under a second 
mortgage ; see Second mortgage. 

Second of exchange. See First, second and third of ex- 
change. 

Second teller. The receiving teller in a bank. 

Secretary. The secretary of a stock company prepares and 
keeps its records. 

Secretary of the Treasury. The chief fiscal officer of the 
United States ; he is a member of the President's cabinet. 

Secret partner. A partner whose interest in the business is 
kept secret ; that is, withheld from public knowledge. 

Secured. Protected against loss. 

Secured creditor. A creditor whose claim is secured (pay- 
ment of it is insured) by a pledge of property or by a lien. 

Securities company. Same as holding company ; a company 
which owns the securities of other companies and depends for 



466 SMITH'S FINANCIAL DICTIONARY. 

its income upon the interest and dividends yielded by these 
securities. It usually issues bonds as well as stock itself. 
Its bonds are collateral trust bonds, being secured by bonds 
or stocks of other companies owned by it. A securities com- 
pany is not necessarily a controlling company — it is not neces- 
sary that it should possess a majority of the stocks of the com- 
panies whose securities constitute or are included in its assets. 

Security. Something of value pledged for the performance 
or fulfilment of a contract, as the payment of a loan; also a 
name for a stock or bond. 

Security bill. The name given to a bill of exchange (draft) 
drawn against securities (stocks or bonds) which are attached 
to (accompany) and serve as collateral for the bill — as a 
pledge that the bill will be paid. 

Seigniorage. The difference between the cost of bullion and 
the value of the coin into which the bullion is converted. In 
the coinage of gold there is, of course, no seigniorage for the 
reason that the act of coining adds no value whatever to the 
metal. Coinage of gold is merely an official certification of 
weight and quality for the sake of convenience. 

Sell. To dispose of in exchange for money or other con- 
sideration. 

Seller four, ten, twenty, thirty or sixty. When a stock is 
so sold the seller has the right to deliver it to the buyer on any 
day within the number of days specified on one day's notice to 
the buyer. The seller must in any event deliver the stock on 
the final day. 

When a contract is of four or more days' duration the buyer 
must, unless the contract is flat (without interest), pay interest 
at the legal rate on the price of the stock up to the day of de- 
livery. The amount of a dividend becoming due on the stock 
during the pendency of the contract is payable by the seller to 
the buyer. 

No contract on seller's (or buyer's) option for less than 4 
days or which extends beyond 60 days can be entered into on 
the New York Stock Exchange. 

Seller's option. A seller's option is, in effect, a put. In 
stocks sold on seller's option the seller may, when the option is 
for more than three days, put (deliver) the stock on any day 
within the specified time on one day's notice to the buyer. 



SMITH'S FINANCIAL DICTIONARY. 467 

In a contract for four or more days the buyer, unless the con- 
tract is flat (without interest), pays to the seller interest at the 
legal rate on the price of the stock up to the day of delivery. 
The amount of a dividend becoming due during the pendency 
of a contract is payable by the seller to the buyer. 

No contract on seller's (or buyer's) option for less than 4 
days or which extends beyond 60 days can be entered into on 
the New York Stock Exchange. 

A future contract in grain, cotton, coffee or other specula- 
tive commodity is at the seller's option unless otherwise stipu- 
lated and gives the seller the right to deliver the commodity 
on any business day in the month of delivery on due notice to 
the buyer. 

Sellers over. London Stock Exchange term, meaning that 
there are sellers at 1-32 of a pound over a given figare or frac- 
tion (sixteenth). 

Seller the year. A contract which gives the seller the right 
to make a delivery of the property at any time within the year. 

No contract on seller's (or buyer's) option for less than 4 
days or which extends beyond 60 days can be entered into on 
the New York Stock Exchange. 

Selling a bear. London Stock Exchange term, meaning sell- 
ing short in expectation of a decline in price ; in other words, 
selling stock not owned in expectation of buying it back at a 
lower price. The term means the same as the New York Stock 
Exchange term selling short. 

Selling dividends. See Buying and selling dividends. 

Selling investment securities. See Investment securities. 

Selling out. When a broker arbitrarily closes the account 
(in stocks or commodities) of a customer for failure to provide 
margin or for some similar reason the operation is described as 
selling out the customer. 

On the London Stock Exchange when a seller of stock or 
shares does not receive from his buyer the name of the party to 
whom the stock is to be transferred (see Name) by an appointed 
time he is entitled to sell the stock out ; that is, to instruct the 
official broker to make a fresh sale for cash. The difference 
between the price at which the fresh sale is made and that of 
the original bargain, together with the official broker's commis- 



468 SMITH'S FINANCIAL DICTIONARY. 

sion, is charged to the person responsible for the delay in pass- 
ing the name. 

Selling rate. In dealings in exchange the selling rate is the 
rate at which exchange is sold by a dealer in it. 

Selling short. In Wall Street this consists in selling stocks 
not owned and borrowing them for immediate delivery. When 
finally bought in (covered) the borrowed stocks are returned. 
If in the interval between selling and buying the stocks have 
declined the trade is profitable ; if there has been an advance it 
is unprofitable. 

Sending in. When a speculator buys (or sells) stock 
through a broker with whom he has no account he directs this 
broker to ''send in" the transaction to a broker with whom he 
has an account. The first broker merely executes the order; 
the second receives (or delivers) the stock. 

The first broker in such a case acts as a two-dollar broker 
and collects his fee from the second broker, who charges the 
person for whom the stock was bought or sold the full com- 
mission the same as if he (the second broker) had executed the 
order. 

Another instance of sending in is when a speculator transfers 
his account from one broker to another. In such a case he di- 
rects the broker who was originally employed to send in or 
transfer his contracts to the second broker. It is the same if 
he transfers only part of his account to another broker. 

Separable contract. A contract which contains distinct and 
separable specifications. 

Serial bonds. An issue of bonds different parts or amounts 
of which are redeemable at specified intervals. For instance, 
an issue of $10,000,000 may be redeemable $1,000,000 each year 
until at the end of ten years all have been redeemed. 

Serial motes. A series of promissory notes issued in dis- 
charge of a single obligation which fall due (mature) at in- 
tervals. 

Set of exchange. A bill of (foreign) exchange drawn in 
duplicate or triplicate and numbered first and second or first, 
second and third of exchange. Payment of any one copy of 
the bill extinguishes the set. For additional information see 
First, second and third of exchange. 

Settlement. Adjustment of differences in money. In the 



SMITH'S FINANCIAL DICTIONARY. 469 

Operation of the New York Stock Exchange clearing house 
there is also an adjtistment of differences in stocks; for in- 
formation see New York Stock Exchange clearing house. On 
the London Stock Exchange a settlement occurs fortnightly; 
see Settlement, The. 

Settlement, The. The fortnightly settlement on the Lon- 
don Stock Exchange, which formerly lasted for three con- 
secutive da3^s, now takes four days, as the ''carry-over" in 
mining shares begins the day before the ordinary carry- 
over. According to the London custom payments and de- 
liveries in stock transactions are made only twice a month 
instead of every day as is the case in New York. 

A broker on the New^ York Stock Exchange must each day, 
immediately after the close of the exchange, compare his 
mem.oranda of purchases and sales made "regular way" with 
the memoranda of those with whom he has had dealings. This 
is done by means of deliver and receive tickets. (See Com- 
parison). On the following day before 2.15 p. m. all transac- 
tions must be closed by actual payment and delivery or adjust- 
ment through the stock exchange clearing house. 

In London, on the contrary, this comparison of memoranda, 
adjustment and payment of differences and delivery of stocks 
occurs only twice a month. The exact days for each fortnightly 
settlement in London are fixed considerably in advance by the 
committee for general purposes. 

The first day is continuation day or contango day or mak- 
ing-up day or carrying-over day in mining shares. The sec- 
ond day is another (an added) continuation day in mining 
shares. The second day is continuation day in other securities. 
On these days the brokers (not the jobbers, but the ones who 
represent the public and buy from or sell to jobbers) having 
found out from their clients (customers) whether the clients 
intend to pay for the stocks they have bought or intend to de- 
liver the stocks which they have sold or whether they intend to 
let their contracts continue tmtil the next settlement proceed 
to carry over such bargains as are to be continued. This is ef- 
fected by entering into a fresh contract, which is of a double 
character. Stock that has been bought and is to be continued 
is sold for cash and repurchased for the new account, both 
bargains being put through at the ''making-up price," and a con- 



470 SMITH'S FINANCIAL DICTIONARY. 

tango rate (see Contango) is generally paid to the broker or 
jobber who takes the stock in, that is to say, lends the money 
to pay for it until the next settlement. But if a stock is so 
much oversold that it is scarce for delivery the buyer who 
wants to continue receives a backwardation. (See Backward- 
ation). Stock that has been sold and is to be continued is 
bought for cash and resold for the new account, both bargains 
being put through at the making-up price, and a contango rate 
is generally paid to the seller by the broker or jobber who lends 
the stock until the next settlement. But if a stock is over- 
sold the seller who does not wish to deliver has to pay a back- 
wardation. 

The third day is called ticket day or name day, because on 
this day tickets (see Ticket) have to be passed (handed) by 
the brokers who have bought to the jobbers from whom they 
have bought, containing the names of those who will receive 
the stocks that have been bought. A ticket is passed on until 
it reaches the real seller, who is thus enabled to complete the 
transfer deed which must accompany each delivery. (See 
Passing a name). 

The fourth day is settlement day or pay day, the day on 
which securities are delivered and paid for, or, if contracts are 
to be continued, the differences necessary to balance accounts 
are paid in money. It is also called account day. 

The extra continuation day in mining shares was made 
necessary by the large business in these shares. 

The settlement in consols and in a few other securities of 
that class occurs only once a month (at the end of the month) 
instead of every fortnight. 

The first day of the settlement is also called making-up day 
for the reason that on this day there is officially fixed for each 
stock a price at which settlements shall be made on bargains 
(contracts) that are to be continued until the next fortnightly 
settlement. One who has bought stock pays to his broker the 
difference if the settlement (making-up) price is lower than 
that at which he bought or he receives from his broker the 
difference if the settlement price is higher than the price at 
which he bought. Conversely, one who has sold stock pays to 
his broker the difference if the making-up price is higher than 



SMITH'S FINANCIAL DICTIONARY. 471 

that at which he sold or he receives from his broker the differ- 
ence if the settlement price is lower than that at which he sold. 

If the buyer, who is bull (long), wishes to defer receipt of the 
stock until the next settlement he agrees to pay for this exten- 
sion and this payment is called contango. The term applies 
whether he secures the consent of the seller to carry the stock 
or makes an arrangement with some one else in the exchange 
to carry it. In New York this would be called interest or car- 
rying charge. 

If the seller, who is bear (short), wishes to defer delivery to 
the next settlement he generally receives the contango ; but if 
the stock is oversold and scarce he has to pay what is called 
backwardation. In New York backwardation would be called 
premium. When a contract continues without charges either 
way it is said to be even. 

Account days, as distinguished from account day or pay day, 
the last day of the settlement, are the four days occupied in the 
settlement considered collectively. 

Settlement day. Same as account day or pay day ; the 
fourth and last day of the settlement (see Settlement, The) on 
the London Stock Exchange, when money payments have to 
be made in accordance with the terms of contracts. 

Settling clerk. The name in New York for the clerk in a 
bank who conducts its clearings at the clearing house ; see 
Clearing house of the associated banks of New York. 

Settling price. The arbitrary price at which a settlement 
of a contract is made. For information as to the fixing of the 
settling price in stocks see New York Stock Exchange clearing 
house. 

SF. As printed on the tape by the stock ticker these letters 
mean sinking fund, as sinking fund bonds. 

Shaking down the market. A Wall Street term, meaning 
manipulation of the market so as to effect a lower range of 
prices. 

Shaking out stocks. A Wall Street term, meaning manipu- 
lation of the market so as to compel the sale of stocks by 
holders. 

Share. As applied to stocks the term means one of the 
equal parts into which the capital stock of a company is 
divided. 



472 SMITH'S FINANCIAL DICTIONARY. 

In Great Britain stocks and shares are different forms into 
which the capital of companies may be divided. Shares are of 
£i.or £2 or any other denomination up to £1,000; but the 
most usual denominations are £1, £5 and £10. The distinc- 
tion between shares and stock lies in the fact that shares are 
indivisible. Any number of shares may be transferred but no 
single share can be divided ; and shares are quoted at so much 
per share. Stock can be divided and dealt in, in some cases, 
in pennyworths. For instance, it is possible to transfer, say, 
£3, IIS. 9d. consols; but usually stock is transferred only in 
multiples of £1 and stock is quoted and dealt in at so much 
per cent.^ A share certificate is a certificate of a share or shares ; 
a stock certificate is a certificate of so much stock. 

The securities issued by a government are generally desig- 
nated as bonds instead of stock. The securities issued by the 
United States government are designated as bonds, although 
formerly known as stock. Some of the securities issued by the 
city of New York are designated as stock ; but municipalities 
as a rule designate their securities as bonds instead of stock. 

For additional information see Stock. 

Share broker. One who deals in shares of stock. This term 
is not in common use ; the term usually employed is stock 
broker. 

Shareholder. A holder of shares of stock. 

Sharp cash. Prompt cash. 

Shave. An extra discount; a premium in addition to the 
rate of interest allowed by law. 

If a borrower receives $5,000 and gives his note for $6,000, 
with interest, the difference of $1,000 is a shave. To buy a note 
or other paper at a greater reduction than the amount of the 
legal rate of interest is to shave it. 

Shearing a lamb. A colloquialism, meaning to take away 
the money of one inexperienced in speculation. 

Shekel. The shekel of the ancient Hebrews was a weight. 
The term shekel is now used, colloquially, to signify money. 
When it is said that a person has shekels it is meant that he 
has money. 

Sherman act. The act of July 14, 1890, which ordered the 
purchase each month by the Secretary of the Treasury of 4,- 
500,000 ounces of silver bullion, or so much thereof as might be 



SMITH'S FINANCIAL DICTIONARY, 473 

offered at the market price, provided the market price did not 
exceed the coinage value, $1.29.29 an ounce. To pay for the 
silver so purchased an issue of Treasury notes redeemable in 
coin was authorized. There was also a clause in the act repeal- 
ing the purchasing clause of the Bland-Allison act of 1878 and 
providing for the coining of 2,000,000 ounces of silver per 
month until July i, 1891, when coinage should cease, except 
when necessary to supply silver dollars for the redemption of 
the Treasury notes. All the remaining bullion and that bought 
thereafter was to be held in the Treasury as security for the 
notes. Seigniorage was to accrue to the Treasury. 

The purchasing clause in the act was repealed November i, 
1893, it having been found that the government purchases of 
silver not only failed to accomplish the result hoped for, viz., 
the maintenance of the price of silver at the coining parity — 
$1.29.29 an ounce — but that silver was declining so rapidly in 
value as to threaten both impairment of the security it offered 
as backing for the notes and an entire upsetting of the mone- 
tary stability of the country. A severe business panic had been 
brought about, complicated by political considerations in 
which the tariff also figured. Before the repeal the notes issued 
under authority of the act were reissued after redemption. 
Since 1893 they have been canceled when redeemed in silver 
and the bullion so released has been coined, gradually reduc- 
ing the Treasury's holdings of bullion. The seigniorage also is 
coined as it accrues. 

For additional information see Treasury note. 

Shifting loans. When banks demand the payment of call 
loans borrowers are obliged to pay off their loans and renew 
them with other banks. This process is called shifting loans. 

Shilling. A silver coin of Great Britain which is worth 12 
pence; the twentieth part of one pound sterling; equal to 24.3 
cents. 

The term shilling is a common one in the United States 
where it means not a coin but an amount, 12 1-2 cents. 

Shinning. A phrase applied to the efforts of a borrower 
to raise money when his credit is so poor that he has to visit 
many lenders before he succeeds. 

Shinplaster. A colloquial name for the fractional paper cur- 
rency issued by the government during the Civil War to serve 



474 SMITH'S FINANCIAL DICTIONARY. 

as small change during the suspension of specie payments. 
The shinplaster was fiat money ; it is out of circulation. 

Shoestring. A colloquialism; when a speculator in stocks, 
for instance, begins with a small sum and concludes his opera- 
tions with a large profit he is said to have started on a shoe- 
string. The expression is sometimes amplified by saying that 
the speculator ran a shoestring up to a tannery or started on 
a shoestring and ran it up to a tannery. 

Shop. London Stock Exchange term for the inside in- 
terests which control a concern and are well informed as to its 
status and prospects. "Selling for the shop" in a railway 
stock would mean selling by the directors or officials and 
would imply that the inside interests had reasons for getting 
out. 

Short. One who has sold a stock which he does not possess 
and has borrowed the stock for delivery to the buyer is short 
of that stock. One who is short of several stocks is said to be 
short ot the market. One who is short is a bear. 

The object of selling short is, of course, to repurchase subse- 
quently at a lower figure. The rules of the New York Stock 
Exchange enforce the completion of each transaction entered 
into "regular way" on the day following the transaction. 
Hence, the speculator who has sold short is forced to borrow 
the stock he has sold but does not own and make actual de- 
livery of it next day to the purchaser. This he accom- 
plishes through his broker by paying the market value of the 
stock to the one from whom he borrowed it and then returning 
the borrowed stock to the lender when he has covered, or in 
other words, bought back the stock. 

For additional information see Borrowing and lending 
stocks. 

When a speculator is short of stock (has sold stock which lie 
did not own) on which a dividend becomes due he has to pay 
the amount of the dividend to the person from whom he bor- 
rowed the stock to make delivery to the one to whom he sold 
stock. 

In speculation in grain, cotton, coffee and other commodities 
contracts to receive and deliver the property are entered into 
the same as in stocks. 



SMITH'S FINANCIAL DICTIONARY, 475 

On the London Stock Exchange it is the custom to say that 
a speculator is bear of stocks instead of short of stocks. 

Short account. A term applied to the collective short (see 
Short) sales of a particular stock or to collective short sales 
of stocks in general, which sales are in expectation of a decline 
in the price of the particular stock or in the prices of stocks 
in general. The term also applies to corresponding sales of 
grain, cotton, coffee, etc. 

Short bill. Same as short-dated bill ; a bill of exchange 
(draft) having a short time to run. A bill running for 30 days 
or less is usually termed a short bill or short-dated bill. 

Short bit. A term used in the Southern and Western states, 
meaning 10 cents. It is derived from the old Spanish real 
which used to circulate in those states and was called a bit 
and was worth nominally 12 1-2 cents. 

Short-dated bill. Same as short bill ; a bill of exchange hav- 
ing a short time to run. A bill running for 30 days or less is 
usually termed a short-dated bill or short bill. 

Short-dated exchange. Same as short exchange ; exchange 
(a bill of exchange) having a short time to run. Exchange 
running for 30 days or less is usually termed short exchange or 
short-dated exchange. 

Also see Short of exchange. 

Shorter's court. A place contiguous to the London Stock 
Exchange (from which there is an entrance to the exchange) 
where curb dealings in American stocks are conducted ''after 
hours." After the London Stock Exchange closes at 4 p. m. 
(which is II a. m. in New York) the business in American 
stocks continues ''on the curb" — in the street in Shorter's court. 

For additional information see Arbitrage. 

Short exchange. Same as short-dated exchange ; exchange 
(a bill of exchange) having a short time to run. Exchange 
running for 30 days or less is usually termed short exchange 
or short-dated exchange. 

Also see Short of exchange. 

Short haul. A railroad term signifying transportation (of 
freight) for a short distance in contradistinction to transporta- 
tion for a long distance, which is called long haul. 

Also see Long and short haul clause. 

Short interest. The collective speculative sales (short sales 



476 SMITH'S FINANCIAL DICTIONARY. 

— see Short) of a particular stock or of stocks in general ; the 
opposite of long interest. The expression "The short interest 
in the market," for example, signifies the aggregate speculative 
short sales of stocks in general. 

Short loan or short money. London money market term 
for money borrowed for a day or so. 

Short market. An oversold market. For instance, when 
more stocks have been sold short (sold when not owned) than 
can be bought back without unduly advancing prices the mar- 
ket (for stocks) is said to be a short market. 

Short notice. Speculative dealings in commodities (grain, 
cotton, cofifee, etc.) are in certificates (warehouse receipts 
which call for the actual property). On a future contract (a 
contract calling for delivery of the commodity in a specified 
future month) a certain number (according to the rules of an 
exchange) of days' notice (called a regular notice) must be 
given by the seller to the buyer of his intention to deliver the 
commodity (that is, the certificate representing it) and collect 
payment for it. This is when the future was sold without 
special conditions. 

When a future is sold without stipulation to the contrary 
delivery is understood as being at the option (at the pleas- 
ure) of the seller on regular notice to the buyer at any time in 
the month in which the commodity becomes cash (is deliver- 
able). In a future at buyer's option the commodity is de- 
liverable on regular notice by the buyer to the seller. 

When a broker buys a contract (accepts the transfer to him- 
self of the contract) upon which regular notice has been given, 
but some part of which notice has elapsed, the notice has be- 
come a short notice. A contract with a short notice is often 
worth less in the market than one with a regular notice. 

Short of exchange. When a drawer of (foreign) exchange 
has issued (sold) exchange against merely his credit with the 
concerns upon which he has drawn or in excess of the com- 
mercial or other bills which he has on hand to use in covering 
(paying) the exchange which he has sold he is short of ex- 
change. 

Short of sterling. The term in full is short of sterling ex- 
change, but it is almost invariably used in its abbreviated form. 
When a drawer of exchange has issued (sold) sterling ex- 



SMITH'S FINANCIAL DICTIONARY. 477 

change against merely the drawer's credit wth the concerns 
upon which he has draAvn or in excess of the commercial or 
other bills which he has on hand to use in covering (paying) 
the exchange he has sold he is short of sterling exchange. 

Short ribs. Short ribs of pork ; there is a considerable spec- 
ulation in short ribs. 

Short selling. In Wall Street this consists in selling stocks 
not owned and borrowing them for immediate delivery. When 
finally bought in (covered) the borrow^ed stocks are returned. 
If in the interval between selling and buying the stocks have 
declined the trade is profitable ; if there has been an advance it 
is unprofitable. 

Short term or short time bond. One maturing in a short 
time. 

Short ton. Two thousand pounds ; a gross or long ton is 
2,240 pounds. A metric ton is 2,204.6 pounds. 

Shunting. London Stock Exchange term for transactions 
of a certain kind between the provincial exchanges and Lon- 
don. If a Liverpool broker knows from the telegrams that he 
receives from his London agent that he can sell Erie shares at 
40 in London, and finds a seller in Liverpool at 39 7-8, he buys, 
and telegraphs to London to resell at 40. Shunting has to be 
conducted smartly or the margin of profit may be gone before 
the telegrams have got through. It is the same as arbitrage, 
but it is applied, as a rule, to inland operations as opposed to 
transactions between London and New York or the Continent. 

Shut for dividend. A term sometimes used in England for 
closed for a dividend, w^hich means that the stock transfer 
books of a company are closed pending the payment of a divi- 
dend. For additional information see Books closed. 

Sight. As applied to a bill of exchange (draft) this term 
means that the bill is to be paid by the drawee (the one upon 
whom it is drawn) on presentation to him, if grace is not al- 
lowed by law in the state or country where the drawee resides ; 
if grace is allowed by law then the bill is payable on the last 
day of grace after sight — after presentation to and acceptance 
by the drawee. There also is usance on bills drawn in some 
countries ; see L^^ sance. 

Check exchange means sight exchange; a check or cheque 



478 SMITH'S FINANCIAL DICTIONARY. 

(English way of spelling check) is payable on demand, or in 
other words, on presentation. 

Sight paper. Paper (promissory notes and bills of ex- 
change) payable on demand or on presentation. 

Signatory. One who has signed the articles of association 
or incorporation of a company. 

Signature. A name as written by the person to whom it be- 
longs. In assigning stock or a registered bond the name 
must be written precisely as it appears on the face of the cer- 
tificate. 

Initials signed to a paper with the intention that they shall 
stand as a signature are binding. In the courts of New York 
state it has frequently been held that any mark made with this 
intention was a sufficient signature. In one case the court 
held that "where a party placed the figures '1.2.8.' upon the 
back of a bill of exchange by way of substitute for his name, in- 
tending thus to bind himself as indorser, it was a valid indorse- 
ment, though it appeared he could write." In another case 
the signature was by initials and the court said : "A party 
signing a written instrument with his initials, intending there- 
by to bind himself, is as effectually bound as he would be by 
writing his name in full." 

Signature book. The book in a bank which contains the 
signatures of depositors. Most banks now keep the signatures 
of depositors on cards. 

Signature card. A card bearing the signature of a depositor 
of a bank and kept on file in the bank for reference. Some 
banks keep the signatures of depositors in a special book. 

Signature mark. A mark serving as a signature. For addi- 
tional information see Signing by mark. 

Signed in blank. A certificate of stock or a registered bond 
signed on the back and witnessed, but with the space for the 
name of the new owner left blank. The correct term is as- 
signed in blank ; see Assigned in blank. 

Signing by mark. Signing by the sign X Avhich is the mark 
used when the signature of an illiterate or physically incapaci- 
tated person is required. 

The name is written by some one else like this : John X Doe. 
Then above the X is written ''His" and below it is written 
^'mark." The illiterate person, if able, makes the mark ; in case 



SMITH'S FINANCIAL DICTIONARY. 479 

of physical incapacity the mark is made for the signer, whose 
fingers are pressed upon the penholder while the point of the 
pen rests upon the X. A signature by mark is usually required 
to be verified by the signatures of two witnesses. 

Signing in liquidation. The act of signing for a firm by that 
member of it who has charge of the winding up of its affairs. 

Sign manual. The signature of a person in his own hand. 

SIL. As printed on the tape by the stock ticker these let- 
ters mean silver. On the New York Stock Exchange silver is 
bought and sold at so much per ounce and the dealings are in 
lots of I, GOO ounces of fine (pure) silver. Not the actual silver 
'is dealt in but certificates which represent silver in storage. 

Silent partner. Same as sleeping partner; one not openly 
and generally declared to be a partner. 

Silver bar. Means, in bullion dealings, a bar (ingot) of pure 
silver. A bar manufactured and assayed by the government is 
called a government bar or government assay bar ; a bar man- 
ufactured and assayed by a private concern is called a com- 
mercial bar. See Silver bullion. 

Silver basis. Exists when values are based on silver money. 
The value of silver money depends on the commercial price of 
silver bullion and this price is regulated by supply and de- 
mand the same as the price of any commodity. 

Silver bullion. London is the recognized silver bullion mar- 
ket of the world. The London price is given (quoted) in 
pence (instead of shillings -and pence) per ounce for silver in 
bars or ingots of the British government standard, which is 
.925 fine (925-1,000 pure silver and 75-1,000 alloy). In the 
United States the price is given (quoted) in cents per ounce 
for fine (pure) silver. 

In New York quotations a double price is given, as for ex- 
ample, 64@65 cents. The first price, 64 cents, is the bid price 
or the price which is offered by a bullion dealer for bars. The 
second price, 65 cents, is the asked price or the price which 
the bullion dealer asks for bars. 

In New York, as in other markets in the United States, quo- 
tations are given for commercial bars and for government 
assay bars. The prices for government bars, which are manu- 
factured and assayed in assay offices belonging to the govern- 
ment, are a little higher than those for commercial bars, which 



48o SMITH'S FINANCIAL DICTIONARY. 

are produced by private smelters. Government bars may be 
no better than commercial bars, but the government stamp 
imparts an additional market value to them. 

On the New York Stock Exchange silver bullion is bought 
and sold at so much per ounce and the dealings are in lots of 
I, GOO ounces of fine (pure) silver. Not the actual silver is 
dealt in but certificates which represent silver in storage. 

Silver certificate. A certificate issued against a correspond- 
ing number of silver dollars held in the Treasury. 

Silver certificates are in denominations of $i, $2, $5, $10, $20, 
$50, $100, $500, $1,000. The issue of them is limited to the 
number of silver dollars deposited in the Treasury. They are 
exchangeable at the Treasury for silver dollars or smaller 
coins. 

Silver certificates are not legal tender, but are receivable for 
customs, taxes and all public dues and when so received may 
be reissued ; they are also available for the reserves of national 
banks. Silver certificates are in effect merely warehouse cer- 
tificates. 

Silver coins. Dollar — weight, 412.5 grains; thickness, .08 
inch; diameter, 1.5 inches. Half-dollar — weight, 192.9 grains; 
thickness, .057 inch; diameter, 1.2 inches. Quarter-dollar — 
weight, 96.45 grains; thickness, .045 inch; diameter, .95 inch. 
Dime — weight, 38.58 grains ; thickness, .032 inch ; diameter, .7 
inch. 

Silver discount. The amount less than a dollar that a dollar 
in silver brings when paid for in gold. 

If 100 gold dollars cost 200 silver dollars silver money is 
at a discount of 50 per cent while gold money is at a premium 
of 100 per cent. 

Silver dollar. Weighs 412 1-2 grains, is .08 of an inch thick 
and its diameter is 1.5 inches. 

There are 480 grains in a troy ounce ; a silver dollar contains 
371.25 grains of fine (pure) silver, the remainder of the weight 
of the coin being 41.25 grains of copper, the total weight of the 
coin being 412.5 grains. To ascertain the commercial (mar- 
ket) value of the silver in a silver dollar multiply the commer- 
cial price of fine silver by 371.25 and divide the result by 480. 

To make the metal value of the silver in a silver dollar worth 



SMITH'S FINANCIAL DICTIONARY. 481 

100 cents the commercial or market price of silver must be 
$1.29.29 per ounce. 

Silver exports. Silver having no fixed value is exported 
tuider the same general conditions as grain, cotton or any 
other commodity. 

Silver prices or quotations. See Silver bullion. 

Silver-purchase act. Another name for the Sherman act, 
which see. 

Silver standard. The silver standard exists in countries 
where it is by law enacted that silver shall be the measure of 
value. At the present time China, the Far East in general 
and some of the countries of South America and of East- 
ern Europe adhere to that standard. Their domestic trade is 
regulated by silver accepted at its bullion value, but all trans- 
actions with the rest of the world are based on gold and in 
the end the value of silver is regulated by these outside trans- 
actions. 

Silver value. See Silver bullion. 

Simoleon. A colloquial name occasionally applied to the 
dollar. To say that one has simoleons is equivalent to say- 
ing that he has the dollars. 

Simple arbitration of exchange. A calculation based on 
rates of exchange between three places to determine the dif- 
ference in the money market rates of the three places or a 
calculation based on the money market rates of three places 
to determine the ratio of exchange between the three places. 
AVhen more than three places are involved in the calculation 
it is called compound arbitration of exchange. 

For additional information see Arbitration of exchange. 

Simple contract. An oral contract or a written contract 
not under seal, which requires a consideration to bind (sup- 
port) it. 

Simple interest. Interest computed on the principal alone 
and not added to the principal to bear interest also as is the 
case in compound interest. 

Single-entry. In single-entry bookkeeping the day-book (a 
day-book and journal kept as one) and the ledger are the es- 
sential books. 

Single-name paper. Paper without indorsement ; bearing 
only the name of the maker. Another designation for single- 



482 SMITH'S FINANCIAL DICTIONARY. 

name paper is straight paper; in fact it is a common practise 
to speak of paper without indorsement as straight paper. 

Single option. London Stock Exchange designation for a 
call or a put. 

Also see Double option. 

Single standard. Exists where either gold or silver is by- 
law the basis of value, but not both. 

Sinking fund. A fund to which are contributed amounts 
of money at specified times for the redemption of a debt. For 
instance, when a sinking fund is established for the redemp- 
tion of an issue of bonds a certain amount of money is added 
to the fund each year (or at other stated intervals) until finally 
the fund amounts to enough to redeem (pay off) the bonds. 

Sometimes the money paid into a sinking fund is invested 
in other bonds (or other securities) the interest payments 
(or dividends) received from which help to swell the sinking 
fund. It is not infrequently the case that a sinking fund is 
established to redeem drawn bonds ; see Drawn bond. 

Sinking fund bond. A bond provision for the payment of 
the principal of which is made by the creation of a sinking 
fund ; see Sinking fund. 

Sinking fund mortgage. A mortgage for the payment of 
which a sinking fund has been established ; see Sinking fund. 

Sixteen-to-one. This term refers to the ratio between gold 
and silver in the coinage of the United States. The exact 
ratio is 15.988 to i, but this is so close to 16 to i as practically 
to make one ounce of gold equal to sixteen ounces of silver in 
coining. 

Sixty. A bill of exchange payable in sixty days is often 
called a sixty; plural, sixties. 

Slaughtering. As a Wall Street colloquialism this term 
means selling at a sacrifice in value. 

SLD. As printed on the tape by the stock ticker these 
letters mean sold. When a sale that has been made on the 
New York Stock Exchange is not recorded (printed) in its 
proper place (in its regular order) the price is preceded by 
the abbreviation SLD., thus : RG. SLD. 75, meaning that 
Reading stock sold at 75. 

Sleeping account. A trade term, meaning an unsettled ac- 
count of long standing. 



SMITH'S FINANCIAL DICTIONARY. 483 

Sleeping partner. Same as silent partner; one not openly 
and generally declared to be a partner. 

Slow account. Same as inactive account ; an account to 
which debits and credits are not frequently added. 

A slow account in a bank is one which is not frequently 
augmented by deposits and likewise is not frequently dimin- 
ished by drafts upon (by checks drawn against) it. 

A slow speculative account (as in stocks, grain, cotton or 
coffee, etc) is one where the speculator does not buy and sell 
with frequency. 

Slow assets. Property applicable to the payment of debts 
which cannot promptly be converted into cash, but which 
must be held for a time in order to dispose of it advantageous- 
ly or without sacrifice. 

Slug. Colloquial name for an octagonal gold piece of the 
value of $50 formerly minted by the government. 

Small bond. A name applied to a bond for a smaller 
amount than $500. As a rule a small bond sells at a lower 
price than a bond for $1,000 (the usual amount) or even a 
bond for $500. Large bond is the name applied to a bond for a 
larger amount than $1,000. 

Small change. Subsidiary silver coins (half-dollar, quar- 
ter-dollar and dime or lo-cent piece) and minor coins (5-cent 
nickel and i-cent bronze). 

Smart money. A term applied to money paid for release 
from an agreement. 

Snap judgment. A judgment taken prematurely, irregularly 
or without due notification. 

Soft coal. A common name for bituminous coal ; see Bi- 
tuminous coal. 

Soft money. A colloquial name for paper money as dis- 
tinguished from hard money (coin). 

Soft spot. Wall Street designation for a stock or group 
of stocks displaying weakness in an otherwise generally strong 
market. 

Sola. A term applied to a foreign bill of exchange when 
drawn singly — that is, when no copy of the bill is made. When 
drawn in duplicate or triplicate each bill is called a via. 

Sold. When a quotation for a stock appears on the tape 
accompanied by the letters SLD (sold) it means that the 



^84 SMITH'S FINANCIAL DICTIONARY. 

Stock sold at the price named, but that the quotation does not 
appear on the tape in its regular order, the sale having been 
made previously. 

• Sold bill. A bill of exchange sold short ; a time bill (bill 
payable at a future specified time) which the drawer has sold 
and to meet which he must at its maturity deliver a demand 
bill (bill payable on presentation), or perhaps cash, to the 
drawee (the one who is to pay the sold bill). 

Sold note. A memorandum of sale delivered by a mer- 
chandise broker to the seller of goods for whom the broker 
acted. 

Sold on order. A term applied to goods for which an order 
has been received by the seller and which have not yet been 
delivered or which are to be delivered in the future. 

For instance, a wholesale dealer may sell on order goods yet 
to be received by him ; or a mill manufacturing woolen goods 
or cotton goods may sell on order its output for three months 
(for three months ahead) — in other words, it may sell goods 
not yet produced the production of which will take three 
months. 

Sold out. See Selling out. 

Sou marquee. A colloquialism, meaning of little value, as 
not worth a sou marquee. The term is derived from the 
French sou marque, an old copper coin worth 15 deniers, 
equal to i 1-4 cents. 

South Sea bubble. The South Sea Company was projected 
(organized) in 1710 by the Prime, Minister of England, Har- 
ley, afterward Earl of Oxford, to effect a reduction of the in- 
terest on the funded debt. By 1720 the necessities of the 
nation had increased to such an extent that the plan of the 
South Sea Company was accepted by the government. This 
plan provided for the uniting or consolidation of the debts of 
the state upon which the state was to pay 5 per cent until 
1727 and 4 per cent thereafter. The South Sea Company was 
to receive a valuable monopoly for its services, to wit : the 
exclusive privilege of trading to the Pacific ocean and along 
the east coast of America from the Orinoco to Cape Horn. 

The company's method of consolidating the English gov- 
ernment debts was by offering its own stock in exchange for 
the securities representing the debts. The South Sea Com- 



SMITH'S FINANCIAL DICTIONARY. 485 

pany's ofler was considered so advantageous that the holders 
of government securities, or annuities, as they were commonly 
called, rushed to embrace it. These holders thought that by 
exchanging their securities for South Sea shares they would 
i;eceive an annuity of 10 per cent instead of 5 per cent. 

The par value of the shares of the South Sea Company 
was £100. By the middle of 1720 they had risen to £1,000. 
The apparent success of the South Sea Company inspired 
schemes without end. The objects of some of them were most 
absurd, such as ''for the discovery of perpetual motion," "for 
the fattening of hogs," "for the importation of jackasses," etc. 
There were instances of shares reaching a premium of 2,000 
per cent. One projector announced a "Company for carrying 
on an undertaking of great advantage, but nobody to know 
what it is; every subscriber who deposits £2 per share to 
be entitled to £100 per annum." This individual in five 
hours received subscriptions to the amount of £2,000 and the 
next day w^as nowhere to be found. 

The companies that were formed after the organization of 
the South Sea Company were the first to collapse, but the 
South Sea Company burst not long afterward. The loss by 
its failure was tremendous. Thereafter the South Sea. Com- 
pany was known as the South Sea bubble. 

Sovereign. A gold coin of Great Britain worth 20 shill- 
ings or £1 and equal to $4.86.65. 

Special account. A special account in a bank is one created 
for a special or particular purpose, as distinguished from a 
general account, which is an account to which credits are 
added and against which checks are draAvn in the ordinary 
course. 

Special agent. A person authorized to act for another in a 
particular matter or transaction. 

Special aid bond. One of an issue in aid of some enterprise, 
as a railroad or manufacturing concern, which is expected tq 
benefit the nation, state or municipality which issues the 
bonds. 

Special assessment bond. One of an issue of municipal 
bonds payable, principal and interest, from special taxes levied 
upon particular property for an improvement from which this 
property derives special benefit. 



486 SMITH'S FINANCIAL DICTIONARY, 

Special carrier. One who carries persons or goods only 
by special arrangement. 

Special damages. Loss or injury sustained in addition to 
that proceeding from the particular act complained of. 

Special deposit. A special deposit made with a bank is a 
deposit for safe keeping; to be kept as received in the vaults 
of the bank until called for. A general deposit is a deposit re- 
ceived and placed with the funds of the bank to be loaned to 
customers and used in the general business with other funds 
of the bank. 

Special depository. A bank, trust company or other insti- 
tution legally designated to receive special and particular de- 
posits of trust funds or public funds. The institution usually 
is required to provide a bond or other security for the safe- 
keeping and return of the funds ; usually, also, it is required to 
pay interest on these funds — sometimes at a rate fixed by law. 

Special indorsement. Same as indorsement in full ; an in- 
dorsement on a check, draft, promissory note or other negoti- 
able instrument or paper which transfers the instrument spe- 
cifically to a new holder — that is, the payee (the holder 
or owner) formally makes over the paper in writing on the 
back to another whose name is given. Then the paper is pay- 
able only to the one to whom it has been explicitly transferred 
and not to any one who may chance to have possession of it. 

Specialist. On the New York Stock Exchange a specialist 
is a broker who confines his attention to one or to a very few 
stocks ; he is a specialist in the one stock in particular or in 
the few stocks to which he may devote his attention. 

Special partner. A special partner is one who contributes 
to the capital of a firm but takes no part in the conduct of the 
business. 

In New York state a special partner is liable for the obli- 
gations of the firm only to the amount contributed by him. 
He may receive interest on his contribution at the legal rate 
if such interest does not reduce the original amount of the 
capital. If after the payment of interest a profit remains he 
may receive his portion of it. If a special partner participates 
in or interferes in the management of the business he becomes 
lial)le as a general partner. 



SMITH'S FINANCIAL DICTIONARY. 487 

Special power of attorney. Written authority to act for an- 
other in a specific act and not extending beyond that act. 

Special settlement. London Stock Exchange term; when 
new securities are issued the issuers apply to the committee of 
the stock exchange for a special settlement in them ; the com- 
mittee, if it grants the settlement, fixes its date. 

Specie. Metallic money, but generally construed as gold 
and silver money. 

Specie payment. A payment in metallic money, but gen- 
erally construed as meaning gold or silver money. 

Also see Resumption act of 1875. 

Specie point. This is a term used in foreign exchange deal- 
ings ; it means the same as gold point, but gold point is the 
term more commonly used. Literally, specie means any kind 
of metal money, while there is but one meaning to gold. 

Speculating for differences. London Stock Exchange term ; 
said when a person buys or sells a stock merely in the hope 
of earning a gambling profit and not because he wishes to in- 
vest in it or deliver it. 

Speculation. Dealing on expectations ; buying in expecta- 
tion of an advance or selling in expectation of a decline. 

There is a constant, large speculation in stocks, bonds, grain, 
cotton and coffee. Speculative operations are conducted on 
margin — that is, speculators deposit with the brokers who ex- 
ecute their orders certain amounts of money, designated as 
margins, which are intended to protect the brokers in case 
the movement of prices should be against the speculators and 
they (the speculators) should be unwilling or unable to make 
good the loss sustained. A party who purchases a stock or 
a commodity in anticipation of a rise and pays the full price 
of it is not, in the usual acceptation, engaged in speculation. 

The customary margin furnished in a transaction in a stock 
is 10 per cent of the par (face) value of the stock dealt in — 
not the market value. The par v^lue of a share of stock, in 
dealings as conducted on the New York Stock Exchange, is 
reckoned by percentage (100 being par), no matter what its 
amount may be in dollars. A margin of 10 per cent on 100 
shares of a stock each of which is of the par value of $100 is 



SMITH'S FINANCIAL DICTIONARY. 



$i,ooo; on loo shares of stock each of which is of the amount 
of $50 the margin is $500 and on 100 shares each of which 
is of the amount of $25 the margin is $250. Most shares are 
for $100 each and such are called full shares, or more com- 
monly, full-stock. Some shares are for $50 each and these are 
called half-stock. A few shares are for $25 each and these are 
called quarter-stock. 

When the speculator puts up (provides) 10 per cent margin 
on a purchase of 100 shares of stock of the amount of $100 
each the broker has received from him $1,000, while the cost 
of the stock, if purchased at 100, is $10,000. The difference of 
$9,000 is supplied by the broker, who charges the speculator 
interest on this sum. If the stock goes up and is sold at, say, 
105, or 5 points above the purchase price, the speculator has 
made $500, from which, however, is to be deducted the broker's 
commission, as well as the interest on the money supplied by 
the broker for use in the purchase of the stock. 

Stock bought to be sold again (at, it is expected, a price 
higher than that at which it was purchased) is called long 
stock. Short stock is stock sold when not owned. It is sold in 
the expectation that it can be bought back at a price below 
the selling price. Margin on short stock is provided the same 
as on long stock. When the broker sells the stock he has to 
borrow it from somebody to make delivery to the purchaser. 
When the stock is hnally repurchased it is used in making 
return of the borrowed stock. (See Borrowing and lending 
stocks). If the stock goes down and is bought back at, say, 
5 points below the selling price the profit is $500 (on 100 
shares), less the broker's commission. There is, as a rule, no 
interest charge on short stock; (for explanation see Interest). 

The broker's commission is 1-8 of i per cent on the par value 
of the stock, amounting to $12.50 for buying 100 shares of 
stock and the same for selling, thus making the cost of a 
"turn" in 100 shares of stock $25. A dividend paid during the 
pendency of a contract goes to the nominal owner of the 
stock. 

Stock operations ordinarily carried on in New York com- 
prise ; (i) Buying for a rise or going long of stocks; (2) 
selling for a decline or going short of stocks ; (3) buying or 
selling on option ; (4) buying or selling privileges, known as 



SMITH'S FINANCIAL DICTIONARY. 4S9 

puts, calls, spreads and straddles. Privileges are not recog- 
nized by the New York Stock Exchange. 

In buying for a rise the speculator usually deposits $1,000 
with his broker as a 10 per cent "margin" on 100 shares of 
stock. The broker holds (carries) the stock until ordered to 
sell it or until the margin is nearly exhausted. In the latter 
case if the speculator on request fails to provide more mar- 
gin the broker is at liberty to sell the stock immediately and 
charge the speculator with the loss, if any. A speculator who 
has bought for a rise is said to be long and he is a "bull." 

Selling for a decline or selling short is the opposite of buy- 
ing, except that the seller, not having the stock, is obliged to 
borrow it for delivery and take the risk of buying it back at 
a future day to return to the lender. The chief risk in selling 
short is in the possibility of a corner in the stock as a result 
of which the price may be forced up to an extraordinary figure. 
Ordinarily the speculator has no interest to pay on stock sold 
short, but if it is scarce a consideration may have to be paid 
to the lender for its use from day to day. Margins and com- 
missions are the same as in the case of stock bought. A specu- 
lator who has sold for a fall is said to be short and he is a 
"bear." 

In buying or selling on option the purchaser or the 
seller, as may be stipulated, has the option to call 
for or to tender the stock at the price named at any 
time within the period limited by the contract. The New 
York Stock Exchange does not recognize such contracts 
for less than 4 days nor for more than 60 days. A speculator 
anticipating a rise in a stock may purchase 100 shares buyer 
30, which gives him the option or right to call for the delivery 
of the stock at any time within 30 days at the price named, 
this price being usually somewhat above the price ruling at the 
time. If a decline in a stock is expected a sale is made seller 30, 
or at the seller's option to deliver at any time within 30 days at 
the price named, the price being usually below the price ruling 
at the time. In purchases at buyer's option the buyer is 
charged with interest on the price of the stock up to the time 
he calls for it. In sales at seller's option the seller is credited 
with interest on the price of the stock until he delivers it. In- 



490 SMITH'S FINANCIAL DICTIONARY. 

terest is at 6 per cent and at the end of the optional period the 
seller is obliged to deliver and the buyer to receive the stock if 
the contract has not previously been closed. Margins and com- 
missions are the same on stocks bought or sold. 

Privileges, or puts, calls, spreads and straddles are con- 
tracts entitling the holder to receive or deliver certain stocks 
at any time within a specified period (usually 30 or 60 days) 
and at a specified price. In a spread and likewise in a 
straddle the privilege is either to receive or deliver. A cash 
price is paid for the contract by the purchaser and his entire 
liability is limited to that amount. The matter of interest is 
not involved in the contract. The amount paid for a put or a 
call is generally $100 on 100 shares for 30 days and $150 to 
$200 for 60 days; and for a double privilege (a spread or a 
straddle) a larger amount. 

A put, which entitles the holder to put or deliver stock to 
the signer, reads as follows : 

For value received, the bearer may deliver me one hundred shares of 
the stock of the (name of company) at the price of . . . per cent any 
time in thirty days from date. The undersigned is entitled to all divi- 
dends declared during the time. 

A call, which entitles the holder to call for or demand stock 
from the signer, reads as follows : 

For value received, the bearer may call on me for one hundred shares 
of the stock of the (name of company) at the price of . . . per cent any 
time in thirty days from date, The bearer is entitled to all dividends de- 
clared dt^ring the time. 

A spread entitles the holder either to deliver to the signer 
stock at one price or to demand it from the signer at an- 
other price. If the price named in both cases is the same the 
contract is known as a straddle. The contract reads substan- 
tially as follows : 

For value received, the bearer may call on the undersigned for one 
hundred shares of the stock of the (name of company) at . . . per cent 
any time in thirty days from date. 

Or, the bearer may put or deliver the same stock to the undersigned, 
at . . . per cent any time within the period named. All dividends de- 
clared during the time are to go with the stock in either case. 

The purchaser of a put, call, spread or straddle can lose only 
the amount paid for the contract. 

When a broker buys stock for a speculator the certificate 
is not made out in the name of the speculator. A certificate 



SMITH'S FINANCIAL DICTIONARY. 491 

signed (assigned) in blank (see Assigned in blank) is received 
by the buying broker from the selling broker and this certif- 
icate may on the resale of the stock be delivered to the new 
buying broker, and so on, the same certificate continuing to 
serve indefinitely in transactions. 

Grain, cotton, coffee, etc., are bought for a rise or sold 
short for a fall the same as stocks. Most of the dealings in 
these commodities are in futures, by which is meant that 
when a purchase is made the property is to be received in 
a specified future month or when a sale is made the property 
is to be delivered in a specified future month. 

For the amounts of stocks, bonds, grain, cotton, coffee, etc., 
usually dealt in see Regular lot ; for margins usually required 
see Margin, and for commissions charged see Commission. 

Speculative business. This term is generally construed as 
meaning transactions on margin. For additional information 
see Speculation. 

Speculative investment or investment speculation. Is 
when a person buys outright a stock or a bond, primarily to 
obtain the dividend or interest paid on it, but also with the 
intention of selling should there be a material advance in the 
price of the security. 

Likewise, the term applies when a person buys outright a 
stock that is not paying dividends, but which the buyer ex- 
pects will in time pay dividends, with a resultant improvement 
in the price of the stock ; or the term applies when a person 
buys outright a bond that is not paying interest, but which 
the buyer expects will in time pay interest, with a result- 
ant improvement in the price of the bond. 

Speculative investor. One who buys and pays in full for 
his purchase with the idea of selling on an advance rather than 
holding for dividends or interest. 

Speculator. One who deals on expectations ; one who buys 
in expectation of an advance or sells in expectation of a de- 
cline. For additional information see Speculation. 

Spilling stock. A Wall Street colloquialism, meaning to 
release stock ; to throw it on the market. When stocks are 
disposed of from necessity they are spilled. The term also is 
used when stock is sold to break down prices or to keep 
prices from advancing. 



492 SMITH'S FINANCIAL DICTIONARY, 

Split coin. A term applied to a coin (generally a gold coin) 
which has been cut in two in a way that permits a portion of 
the metal to be removed from the interior and replaced with 
a base metal, after which the two parts of the coin are joined 
and the coin is put into circulation again. 

Split order. Designation for an order in stocks (or in grain, 
cotton or coffee, etc.) to be executed partly at one time or 
price and partly at another time or price. 

Split quotation. Designation for a quotation in sixteenths, 
occasionally used in grain, but seldom in stocks. For instance 
ID 1-16 is a split quotation. Regular quotations are in. eighths; 
10 1-8 is a regular quotation. 

Split sale. Designation for a sale of stocks (or of grain, 
cotton or coffee, etc.) partly at one time or price and partly at 
another time or price. 

Split stock. London Stock Exchange term for ordinary 
(common) stock which has been divided into preferred or- 
dinary, which receives a fixed rate of dividend, and deferred 
ordinary, which receives a varying dividend in accordance 
with the balance remaining after payment on the preferred 
ordinary. 

Splitting commissions. When a broker divides his com- 
mission with a customer or with somebody else who, for in- 
stance, procures business for him he has split his commission. 
This is an infraction of New York Stock Exchange rules. 

Spondulicks. A slang name for money, more particularly 
for paper money, as ''I have spondulicks," meaning money. 
The name was frequently used in referring to greenbacks 
(United States notes) when they were the chief circu- 
lating medium. The name is said originally to have been 
applied to the cowry-shells used as money on the west 
coast of Africa. There is a specimen of cowry-shell money in 
the Mint at Philadelphia which was obtained from Spondula, 
Africa, and on it has been conferred the nickname spondulick. 

Spot. A spot contract in grain, cotton or coffee, etc., is 
one for immediate fulfilment ; same as cash. 

Spot cash. Cash paid on the spot; that is, cash paid im- 
mediately. 

Also see Net cash. 



S%IITH'S FINANCIAL DICTIONARY. 493 

Spot quotation. The price for immediate delivery. 

Spread. A spread is like a straddle a double privilege, a 
put and a call combined. If the stock goes below the price 
named in the put end (or part), plus the cost of the spread, 
the holder of the spread profits ; so, also, if the stock goes 
above the price named in the call end (or part), plus the cost 
of the call, the holder of the call profits. 

Illustration : A spread on lOO shares may be bought on 
which the stock may be called (called for) at 102 1-2, or put 
(delivered) at 97 1-2. Say, 2 1-2 per cent ($250) is paid for the 
spread. Then the stock must go above 105 or below 95 be- 
fore there is a profit in the spread. 

If a dividend becomes due on a stock during the pendency 
of a spread on it the dividend goes to the holder of the spread 
if he elects to receive and pay for the stock, but it goes to the 
seller of the spread if the stock is put (delivered) to him. A 
dividend always goes with the stock. 

For additional information see Privilege. 

The term spread is also applied to an arbitrage operation in 
a commodity (grain, cotton or coffee, etc.) and also in a 
stock when different prices prevail normally as well as from 
fluctuations for the same thing in different markets. 

The thing is sold in one market and simultaneously bought 
in another to be subsequently bought where it was sold and 
simultaneously sold where it was bought. 

In grain, for instance, there is a normal difference in price 
between two markets equal to the cost of transporting the 
grain from the market where the lower price prevails to the 
market where the higher price prevails. To permit a profit on 
a spread the difference in price between the two markets must 
be greater than the normal difference. 

Grain may, for example, be sold in New York and bought 
in Chicago when the price in New York is sufficiently above 
the price in Chicago to more than equal the cost of the trans- 
portation of the grain from Chicago to New York. 

The normal difference between New York and Chicago in 
the price of wheat is, say, 6 cents a bushel — that is, wheat 
is normally 6 cents a bushel higher in price in New York than 
in Chicago. Say a difiference of 8 cents or 2 cents more than 



494 SMITH'S FINANCIAL DICTIONARY. 

the normal difference is found to exist. The speculator sells 
in New York and buys in Chicago. If the New York price 
drops 2 cents while the Chicago price remains stationary the 
speculator sells in Chicago and neither makes nor loses on 
the transaction there while he buys in New York and makes 
2 cents a bushel on the transaction there. Or, if the New York 
price drops i cent and the Chicago price advances i cent he 
sells in Chicago and makes i cent a bushel on the transaction 
there and he buys in New York and makes i cent a bushel on 
the transaction there or 2 cents in the two places. 

A spread is distinguished from a back spread from the fact 
that in a spread the diffei'ence in price between the two mar- 
kets is greater than the normal difference ; whereas, in a 
back spread the difference in price between the two markets 
is less than the normal difference; see Back spread. 

A spread between New York and Liverpool or between Chi- 
cago and Liverpool or between any market in one country and 
any market in another country is effected in the same manner 
as a spread between New York and Chicago. 

Likewise, a spread in cotton, coffee or any other commodity 
is effected in the same manner as in grain. 

For information as to a spread in an abritrage operation in a 
stock see Arbitrage. 

Spread-eagle. A name formerly applied to a spread on a 
stock; see Spread. 

Spring wheat states. The states which produce large crops 
of spring wheat, viz : Iowa, Minnesota, Nebraska, North Da- 
kota, South Dakota, Washington, Wisconsin. 

Squeeze. When the bears have sold stocks short and are 
compelled to buy them back at heavy loss to themselves they 
have, in speculative parlance, been squeezed. 

The culmination of a corner is also designated a squeeze ; see 
Corner. 

Squeezed out. A Wall Street colloquialism, meaning en- 
forced liquidation ; the compulsory closing of a transaction by 
reason of inability longer to provide margin or inability longer 
to endure loss. 

STA. As printed on the tape by the stock ticker these 
letters mean stamped, as a bond or stock stamped with a 



SMITH'S FINANCIAL DICTIONARY. 495 



guarantee or some condition or with an acknowledgment of an 
assessment paid on it. 

Stag. London Stock Exchange term for one who sub- 
scribes for shares or stock of a new company or for a new 
issue of stock or shares, with no intention of keeping the stock 
or shares, but instead of selling at once at a profit. As soon as 
he receives notice of his allotment he sells at the premium 
quoted in the market. 

Stagging the market. London Stock Exchange term de- 
scribing the operation of speculators who subscribe for the 
stock or shares of a new company only for the purpose of sell- 
ing their allotment at a premium ; such an operator is a stag. 

Stale bull account. London Stock Exchange term, mean- 
ing a situation when the bulls who have been holding stocks 
have become wearied and are anxious to sell, even at a loss. 

Stale check. A check retained for an unduly long time be- 
fore presentation for collection. 

Stamp-duty. In Great Britain a duty or tax imposed on the 
paper or parchment on which legal instruments are written; 
also, a duty or tax imposed on certain commodities to which 
(when in package) a government label is attached in evidence 
that the duty or tax has been paid. 

Stamped bond or stock. A bond or stock upon which 
some condition, guarantee, privilege or requirement is stamp- 
ed. A bond which is guaranteed by another company 
usually has the guarantee stamped on it. A stock upon which 
an assessment is levied has stamped upon it payments of in- 
stalments of the assessment as the payments are made. 

Stamp-tax. Same as stamp-duty ; see Stamp-duty. 

Standard. In its relation to money standard means the 
measure or basis of value. 

A country where gold alone is by law the basis of value has 
a single standard ; where silver alone is by law the basis of 
value the country has a single standard. Where both gold 
and silver are used, the one in fixed proportion to the other, 
the country has a double standard or bimetallic standard. A 
country using paper money alone has no standard. 

For additional information see Monetary standard. 

Standard gold dollar. A gold coin of the United States, 



49b SMITH'S FINANCIAL DICTIONARY. 

weighing 25.8 grains, nine-tenths fine, that is, nine-tenths gold 
and one-tenth alloy. The gold dollar is no longer coined, but 
it remains the basis of value. 

Standard of coinage. The proportion of weight of fine 
(pure) metal and alloy in coins as established by law. For 
additional information see Monetary standard. 

Standard silver dollar. The silver dollar of the United 
States, weighing 412 1-2 grains, nine-tenths fine, that is, nine- 
tenths silver and one-tenth alloy (copper). 

The phrase "standard silver dollar" is a misnomer. It was 
first employed to distinguish the dollar of 412 1-2 grains from 
the trade dollar of 420 grains. The standard silver dollar is, 
as a fact, not a standard of anything ; its value in trade is much 
more than its metallic value because the government prac- 
tically redeems it in gold. 

State bank. One deriving its authority to do business from 
the state in which it is situated. 

A state bank in New York state in a city of more than 800,- 
000 inhabitants is required to keep a reserve of 15 per cent and 
in a place of less than 800,000 inhabitants it is required to keep 
a reserve of 10 per cent. This is called "lawful money re- 
serve." The requirement is the same in the case of a private 
bank or banker operating under the supervision of the banking 
department. 

For additional information see Bank. 

State Bank of Indiana. The State Bank of Indiana occupies 
a notable place in the financial history of the United States. 
It was practically a state institution, the state owning one-half 
of its capital stock and appointing its president and four of its 
seven directors. The State Bank was a supervisory institution. 
It did not itself carry on banking operations ; the actual bank- 
ing business was conducted by seventeen branch banks. The 
State Bank had a monopoly of banking and the right to issue 
notes in the state of Indiana ; by law no other banking corpora- 
tion was to be created or permitted in the state. 

The State Bank of Indiana began business November 20, 
1834. Its management was remarkably strong. So high was 
the standing of the bank that in the panic of 1837, when bank 
failures throughout the country were numerous and the notes 



SMITH'S FINANCIAL DICTIONARY. 497 

of banks in other states were at a great discount, the notes of 
the State Bank of Indiana were at a premium in the West and 
South and in the East were at a sHght discount only. 

The State Bank was succeeded in 1857 by the Bank of the 
State of Indiana, a private corporation, the legislature having 
repealed the law which granted a monopoly in banking to the 
State Bank and decreed that the state should not longer be a 
stockholder in any bank. The Bank of the State of Indiana, like 
the State Bank of Indiana, was a supervisory institution. It 
conducted its banking business through twenty branches. 
The Bank of the State of Indiana maintained the splendid 
record of its predecessor, the State Bank of Indiana, and con- 
tinued until 1866, when it voluntarily wound up. It stopped 
on account of the imposition of a Federal tax of 10 per cent 
on notes other than those issued by national banks, which 
effectually prohibited it from further issuance of notes. Seven- 
teen of the branch banks were converted into national banks, 
two became private banks and one liquidated. 

State bond. A bond issued by a state. 

Statement. A detailed written report of the existing con- 
dition of an account is called a statement. 

Statement rendered. Same as account rendered ; see Ac- 
count rendered. 

Statute of limitations. The statute (law) by which a debt 
is outlawed ; see Outlawed. 

Statutory meeting. Every English limited company must 
within three months from the date on which the company is 
entitled to start business hold a general meeting, which is 
called statutory, at w^hich certain formal information has to be 
given to shareholders. 

Stealing eighths and quarters. An expression used (es- 
pecially in the stock market) when a dishonest broker reports 
to customers purchases 1-8 or 1-4 per cent above and sales 1-8 
or 1-4 per cent below the actual prices in transactions. These 
differences he retains for his own benefit, defrauding his cus- 
tomers of them. This practice is infrequent. It is fraud and 
is punishable by expulsion from an exchange. 

Sterling. The standard of monetary value established by 
the British government ; a general designation for English 
money. 



498 SMITH'S FINANCIAL DICTIONARY, 

The term sterling is also applied to gold or silver in ingots 
or bars of the standard of value or fineness established by the 
British government. Sterling gold is 22 parts pure gold and 2 
parts alloy ; sterling silver is 222 parts pure silver and 18 
parts alloy. 

Sterling bill. A bill of exchange payable in pounds sterling. 
There are demand bills, which are payable on presentation, 
and time bills, which are payable at specified future dates. 
There are also cable transfers or cables by which payment is 
ordered by cable. 

For additional information see Foreign exchange. 

Sterling bond. A bond payable, principal and interest, in 
pounds sterling. 

Sterling exchange. Exchange (drafts) on London or any 
part of Great Britain and Ireland, or, speaking generally, 
drafts payable in English money (pounds sterling). 

For additional information see Foreign exchange. 

Sterling loan. A loan of a bill of sterling exchange. .The 
borrower of the bill gives his note for it and pledges stocks or 
other property for its payment when due. Then he sells the 
bill of exchange and obtains the money on it, unless he should 
wish to use it in discharging a remittance abroad, in which 
case he forwards it to London or wherever the obligation may 
be payable. When the obligation becomes due it is (gen- 
erally) settled by the delivery of a demand bill of sterling ex- 
change which the debtor (the borrower of the original bill) 
has purchased for the purpose. Sterling loans are obtained 
when it is difficult to obtain money in the usual ways. 

Stock. The capital of a company represented by shares for 
which negotiable (transferable) certificates are issued. 

The usual varieties of stock in the United States are pre- 
ferred (there may be first and second preferred and even 
third preferred) and common (occasionally called ordinary or 
general stock). Preferred stock is preferred as to assets and 
dividends. It must receive a dividend before one can be paid 
on the common stock and in a distribution of assets it partici- 
pates ahead of common stock. Cumulative preferred stock is 
stock the dividends on which if not paid regularly or in full 
accumulate and must be paid in the future before a dividend 
can be paid on the common stock. Common stock is not pre- 



SMITH'S FINANCIAL DICTIONARY. 499 

ferred as to dividends or assets and seldom or never is made 
cumulative. Often its chief value is its voting power. In 
addition there is founders' stock, which is issued to the or- 
ganizers of a company for services. It is entitled to partici- 
pate in profits after a certain rate of dividend has been paid on 
the common stock in any one period. Such stock formerly 
was frequently issued in Great Britain, but it rarely has been 
issued in the United States. 

In Great Britain when, for dividend purposes, the ordinary 
(common) stock of a company has been divided into two 
parts called preferred or ''B" stock and deferred or "A" 
stock the dividend on the A stock is deferred until a fixed 
amount has been paid on the B stock. This B or preferred 
stock is not the same as preferred stock in the United States. 
What in the United States is called preferred stock is in Great 
Britain called preference stock and preference stock in 
Great Britain may be divided into two or more classes called 
first preference, second preference, etc., just as preferred 
stock in the United States may be divided into two or more 
classes called first preferred, second preferred, etc. When, 
however, there is but one class of preference stock ahead of an 
ordinary stock in Great Britain the B or preferred stock is 
equivalent to second preferred stock in the United States. 

In Great Britain stocks and shares are different forms into 
which the capital of companies may be divided. Shares are 
of £ I or £2 or any other denominations up to £1,000; but 
the most usual denominations are £1, £5 and £10. The 
distinction between shares and stock lies in the fact that shares 
are indivisible. Any number of shares may be transferred, but 
no single share can bo divided, and shares are quoted at so 
mach per share. Stock can be divided and dealt in, in some 
cases, in pennyworths. For instance, it is possible to trans- 
fer, say, £3, IIS. 9d. consols, but usually stock is transferred 
only in multiples of £1, and stock is quoted and dealt in at sr 
much per cent. A share certificate is a certificate of a shan 
or shares ; a stock certificate is a certificate of so much stock. 

The securities issued by a government are generally desig 
nated as bonds instead of stock. The securities issued by the 
United States government are designated as bonds, although 
formerly known as stock. Some of the securities issued by the 



500 SMITH'S FINANCIAL DICTIONARY. 

city of New York are designated as stock; but municipalities 
as a rule designate their securities as bonds instead of stock. 

On the New York Stock Exchange no certificate for more 
than lOO shares of stock is a delivery, but any number of cer- 
tificates which are collectively for lOO shares are a delivery for 
lOO shares the same as a single certificate for lOO shares. 

On the London Stock Exchange (except by special con- 
tract) a certificate of American shares (stocks) is not ac- 
cepted for a larger amount than lo shares of $ioo each or 20 
shares of $50 each ; also, an American bond for a larger amount 
than $1,000 is not accepted. 

Stock broker. One who executes orders to buy and sell 
stocks. 

Stock call. The act of calling off at an exchange or trading 
pbce the list of stocks dealt in there. As the names of the 
stocks are called the buyers and sellers make their bids and 
offers. 

For a definition of the term call as applied to an option see 
Call. 

Stock certificate. See Certificate of stock. 

In Great Britain a distinction is made between stock and 
shares ; see Stock. 

Stock company. Same as joint-stock company; a company 
whose capital stock is divided into shares of equal amount, 
For additional information see Company. 

Stock dividend. A dividend payable in the stock of a com- 
pany which declares such a dividend or (occasionally) in the 
stock of a company owned by it. 

Stock exchange. A place where stocks and bonds are dealt 
m. See New York Stock Exchange. 

Stock exchange clearing house. See New York Stock Ex- 
change clearing house. 

Stock exchange collateral. Consists (in New York) of 
securities which are dealt in on the New York Stock Ex- 
change. For additional information see Collateral loan. 

Stock Exchange Daily OfBcial List. A list of stocks 
dealt in on the London Stock Exchange, published by the 
exchange ; the designation in it "Business done" means that 
transactions have taken place at the prices specified, the prices 
being derived from jobbers' and brokers' markings (prices re- 



SMITH'S FINANCIAL DICTIONARY, 501 

ported by jobbers and brokers who did business at those 
prices). . 

The corresponding publication in New York is the daily list 
of sales on the New York Stock Exchange ; but this list is 
not "official." 

Stock exchange lists. See Stock lists. 

Stockholder. A holder (owner) of stock. 

A stockholder in a New York corporation is personally 
liable to an amount equal to the amount of stock held by him 
for every debt of the corporation until the whole amount of 
its stock issued and outstanding at the time such debt was in- 
curred shall have been fully paid. After the stock is fully 
paid a stockholder is not personally liable except to working- 
men and others employed by the corporation. In both classes 
of liabilities judgment must first be taken against the corpora- 
tion and an execution thereon returned unsatisfied in whole or 
in part. 

It is provided in the New York law that "no stockholder 
shall be personally liable for any debt of the corporation not 
payable within two years from the time it is contracted, nor 
unless an action for its collection shall be brought against 
the corporation within two years after the debt becomes due; 
and no action shall be brought against a stockholder after he 
shall have ceased to be a stockholder for any debt of the cor- 
poration unless brought within two years from the time he 
shall have ceased to be a stockholder." 

If a corporation fails no personal liability attaches to stock- 
holders beyond that here specified. Furthermore, this liability 
attaches only in case the amount of the debt cannot be re- 
covered from the corporation itself. 

Stock- jobbing. In New York this term means the raising 
or lowering of prices of stocks by dishonest or irregular 
methods. 

On the London Stock Exchange the term has no connotation 
of dishonesty ; it means merely dealing in stocks, whether by 
outsiders who are gambling for differences or by jobbers in 
the course of their business. See Jobber. 

Stock lists. The daily printed lists of sales at the New 
New York Stock Exchange; these lists are not "official." 

The blue list, a list printed on blue paper, contains a list of 



502 SMITH'S FINANCIAL DICTIONARY. 

the most active stocks dealt in, with the high, low and last 
prices, together with the number of shares of each stock dealt 
in. 

The red list is a list printed on red paper, containing more 
stocks than the blue list (practically all the active stocks), but 
not all the stocks dealt in. The high, low and last prices are 
given, together with the number of shares of each stock dealt 
in. 

The white list, printed on white paper, contains the transac- 
tic'Us in detail in all stocks and bonds dealt in. This white list 
is divided into three parts called boards. The first board 
contains sales from lo a. m. to 12 noon. The second board 
contains sales from 12 to 2 p. m. The last board contains sales 
from 2 to 3 p. m. 

Formerly, when there were calls of stocks, first board was 
the term applied to the first call of stocks, second board to the 
second call and last board to the last call. 

Stock loan. A loan of stock as distinguished from a loan of 
money. See Borrowing and lending stocks. 

Sometimes the term stock loan is applied to a loan of money 
when the collateral pledged consists of stocks. 

Stock market conditions. The following terms applied to 
the varying phases of the stock market sufiiciently express 
their own meaning : Active, artificial, booming, crazy, dead, 
duM, excited, feverish, fictitious, firm, flat, fluctuating, healthy, 
heavy, inactive, irregular, lively, panicky, quiet, ragged, 
rampant, sagging, soft, stagnant, steady, strong, uneasy, un- 
healthy, unsettled, weak, wild. 

Stock note. This is a name used in Wall Street for a col- 
lateral note — a note the collateral to secure which consists of 
stocks (or bonds or both stock and bonds). 

This name also is applied to the form of the note — that is, 
the reading of the note. For the customary form of a stock 
note (collateral note) see Collateral note. 

Stock of money. This designation includes all money 
issued by the government, whether in the Treasury or in cir- 
culation. 

Stock power. The name given to the irrevocable power of 
attorney used in assigning or transferring title to a certificate 
of stock. 



SMITH'S FINANCIAL DICTIONARY. 503 

Stock savings bank. A stock savings bank is one organized 
with a capital stock and the stockholders receive in dividends 
profits over and above the interest paid on deposits. For ad- 
ditional information see Savings bank. 

Stocks borrowed and loaned. See Borrowing and lending 
stocks. 

Stock ticker. See Ticker. 

Stolen securities. See Lost or stolen securities. 

Stop-loss order. See Stop order. 

Stop order. When an order is given to a broker for the 
purchase of a stock, for instance, at 100, with instructions to 
stop it at 98 it means that the stock is to be sold if it de- 
clines to 98. On the other hand, if a stock is sold short at 100 
with instructions to stop it at 102 it is to be bought back if 
it advances to 102. A stop order is employed principally to 
limit loss in speculation ; in such a case it is specifically desig- 
nated as a stop-loss order. 

Stop payment. When a check has been lost or stolen the 
bank upon which it is drawn is notified to stop payment on it 
if it is presented. 

Stopping stocks at a stock exchange. W^hen one broker has 
an order to buy a certain stock at a certain price and another 
has an order to sell the same stock at the same price the two 
brokers agree that a transaction in the stock shall be con- 
summated between them when that price is reached. In the 
vernacular of speculation the brokers "stop" the stock at the 
agreed price. 

Straddle. A straddle is like a spread a double privilege, a 
put and a call combined, but only one price is named in it. 
The stock may be called (called for) or put (delivered) at 
thi'S price. The stock must go up or down more than the 
amount paid for the straddle before there is a profit in it. 

Illustration: A stock is selling at 100 and a straddle on 100 
shares is bought at this price, for vvliich 5 per cent ($500) is 
paid. The stock, therefore, must go aboAC 105 or below 95 
before there is a profit to the purchaser of the straddle. 

If a dividend becomes due on a stock during the pendency 
of a straddle on it the dividend goes to the holder of the 
straddle if he elects to receive and pay for the stock, but it 



504 SMITH'S FINANCIAL DICTIONARY. 

goes to the seller of the straddle if the stock is put (delivered) 
to him. A dividend always goes with the stock. 

For additional information see Privilege. 

Straddled the market. A speculator who is long of one 
stock and short of another is said to have straddled the 
market. 

Straight paper. A designation for single name paper — a 
promissory note which is without indorsement. 

Street, The. An abbreviation of Wall Street and a common 
designation for the financial district in New York. 

In London the term "The Street" means the vicinity of the 
Stock Exchange, where dealings go on after the exchange (the 
house, so-called) is closed. 

Striking a balance. Finding the difference between debits 
and credits. 

Striking a" bargain. Coming to a mutual agreement. 

Stub or counterfoil. A portion of a document permanently 
retained in a book as a memorandum after the other portion 
has been detached by means of a line of perforations or other- 
wise, as the stub or counterfoil of a check or receipt. 

Stuff. It is a common habit in the markets for grain, cotton, 
coffee, etc., to speak of the actual property as the actual 
stuff in contradistinction to contracts calling for delivery of the 
property at some future time. Such contracts are called 
futures. 

Sub-company. Subsidiary company; see Subsidiary com- 
pany. 

Subsidiary coin. Same as divisional or fractional coin ; a 
coin less than $i in value. The subsidiary coins are the silver 
half-dollar, quarter-dollar and dime (lo cents), nickel 5-cent 
piece and bronze i-cent piece. 

Subsidiary coins are issued according to the needs of the 
country and are redeemable at the Treasury in sums of $20 and 
multiples thereof. 

The silver half-dollar does not weigh one-half as much as 
a silver dollar; neither does the quarter-dollar weigh one- 
fourth as much, nor the dime (10 cents) one-tenth as much. 
The half-dollar weighs 13.35 grains less than half the weight of 
the dollar and the weights of the quarter-dollar and dime are 



SMITH'S FINANCIAL DICTIONARY. 505 

proportionately less. The ratio of subsidiary silver coins to 
gold is 14.953 to I, 

The weights of the subsidiary coins were made proportion- 
ately less than the weight of the dollar to prevent the exporta- 
tion of the subsidiary pieces when the bullion value of the 
silver in a silver dollar should be worth 100 cents or more 
than 100 cents, which was the case at one time. 

The 5-cent nickel and the i-cent bronze are specifically minor 
coins. 

Subsidiary company. A company whose entire stock is 
owned by another company; or which is controlled through 
ownership of a majority of its stock by another company. 

Subsidy. Pecuniary aid granted by a government to an en- 
terprise deemed productive of public benefit. 

Substitution. A powder of attorney and substitution permits 
the one holding the power to transfer it to another — to sub- 
stitute another for himself. 

The word substitution also is used when securities pledged 
as collateral are withdrawn and replaced with other securities 
by consent of the one holding the collateral. 

Sub-Treasury. A branch of the United States Treasury foi 
the receipt and disbursement of revenues and in charge of an 
Assistant Treasurer of the United States. 

Successive indorsement. Successive indorsement is made 
by several persons, the legal effect being to subject each of 
them to each other in the order in which they indorse ; the in- 
dorsement imparts several and successive, but not joint obli- 
gation. 

Suffolk Bank system. A term derived from a scheme for 
the redemption of the notes of state banks which was devised 
by the Suffolk Bank of Boston in 1813. 

The notes of Boston banks at the time were worth 100 
cents on the dollar while those of the country banks of New 
England w^ere at a discount. The Suffolk Bank proposed to 
redeem the notes of the country banks at par if the country 
banks would keep a fixed deposit with it, plus a variable de- 
posit to redeem such of their notes as should reach Boston 
in the course of trade. ' The interest derived from the use 
of the fixed deposit was to reimburse the Suffolk Bank for 
doing the business. The plan served to keep the issue of 



5o6 SMITH'S FINANCIAL DICTIONARY. 

notes within wholesome limits, as it required a backing for 
them ; at the same time, for the reason that a backing was pro- 
vided ior them and likewise that a central place of redemp- 
tion was provided, the value of the notes was maintained at 
par, 

Sunday. In New York state when a contract matures on 
Sunda}^ the following Monday is the earliest day upon which 
performance can be exacted. The debtor cannot be compelled 
to pay on Saturday, because his debt is not then due. The law 
excuses him, for reasons of public policy, from making pay- 
ment on Sunday and no valid demand can be made before 
Monday. 

If a life insurance premuim or any other debt not evidenced 
by a promissory note or check or some form of paper falls 
due on Saturday there is no rule of law under which its pay- 
ment can be deferred until Monday. Only half of Saturday is 
a holiday and only such debts are allowed to go over from 
that day until Monday as are expressly provided for in the 
statute. But all debts falling due on Sunday go over. 

If a note is dated on Sunday but is delivered on a week 
day it is legal, for the validity of a note depends on the time of 
its delivery and not on the time of its inception. Even 
though a note were made and delivered on Sunday the payee 
could throw it aside and sue for the money itself; in other 
words, he could disregard the actual or express contract (the 
note) and sue on the contract implied by the law. 

The law discountenances the making of contracts and the 
transaction of business on Sunday. But making a note is 
not transacting business ; the business is done on the day when 
the note is delivered. A note drawn on Sunday, no matter 
what date it bears, and a note drawn on a secular day (week- 
day) but bearing a Sunday date, are both good if delivered 
on a secular day. The holder of a note bearing a Sunday date 
is not entitled to demand a new note, but he is entitled to 
enforce the one he holds. 

Sundry assets. Unclassified remaining and usually unim- 
portant assets. 

Surety. A person (or corporation) who executes a bond of 
guaranty ; also, a bond of guaranty is a surety. 



SMITH'S FINANCIAL DICTIONARY. 507 

Surety company. A company that furnishes bonds of 
surety; that acts as a guarantor. 

Suretyship. The act and obligation of surety. 

Surplus. Profit set aside after paying expenses and after 
necessary deductions, as for interest, dividends, rentals, taxes, 
etc. 

Surplus reserve. The amount held by a bank against de- 
posits in excess of the amount required by law to be held ; see 
Bank reserve. 

Surplus state. A name given to a state which grows more 
grain (or other commodity) than is required for consumption 
within its own borders. 

Suspense account. An account in which items are charged 
or credited temporarily until it can be determined in what ac- 
count they should be entered ; an account of unpaid notes, 
disputed claims and money in litigation ; an account of claims 
of dubious value. 

Suspension of specie payments. The banks suspended specie 
payments December 28, 1861, as a consequence of the with- 
drawal of gold on deposit with them by the government. 
Specie payments were resumed on January i, 1879. 

Sweating coins. This is a name for an illegal process by 
which a percentage of the metal in gold and silver coin is 
taken away. The method employed is to place a number of 
coins in a bag and shake them roughly until a portion of the 
metal is worn off b}' abrasion — by friction. The dust thus 
obtained is sold and the coins are put into circulation again. 

Sweetening a loan. A colloquialism used in Wall Street 
when high class securities are included in the collateral pledged 
for a loan. 

Swop. A colloquial term, meaning the same as barter; an 
exchange of property. 

Sworn broker. For information see Bourse. 

Syndicate. As a financial term syndicate means several 
bankers or capitalists who join together to carry out or to 
insure the carrying out of some plan or scheme which involves 
a large amount of money. 

The commonest form of syndicate is an underwriting syndi- 
cate. For instance, the capital stock of a company (or a cer- 
tain amount of it) is to be offered for public subscription at, 



So8 SMITH'S FINANCIAL DICTIONARY. 

say, lOO (par). An underwriting syndicate is organized and it 
underwrites the entire issue at 90. It, in effect, buys the whole 
issue at 90. The stock taken (subscribed for) by the public 
practically is sold for account of the syndicate, for it receives 
the difference of 10 per cent between the price at which the 
stock is sold to the public (100) and the price at which it is 
underwritten by the underwriting syndicate (90). The syndi- 
cate is obliged to take the stock not sold to (subscribed for 
by) the public, but it has to pay only 90 for it as against 100 
which the public has to pay. If all the stock is taken by the 
public (as is often the case) the underwriting syndicate has 
not to take and pay for any stock, but simply receives and 
divides among its members (in proportion to their shares in 
the syndicate) the amount represented by the difference of 10 
per cent between the price of the stock to the public and the 
price to the underwriting syndicate. If some of the stock is 
not taken by the public it may be apportioned among the mem- 
bers of the syndicate, but usually it is sold (in the open mar- 
ket or otherwise) for the syndicate. 

The bonds of a company (or a certain amount of them) 
may be underwritten in the same way as its stock. 

A purchasing (or subscription) syndicate is different from 
an underwriting syndicate. A purchasing syndicate actually 
subscribes for takes and pays for the stock or bonds, which 
may be allotted to the members of the syndicate in proportion 
to their shares in it, or the stock or bonds may be sold and the 
profit (presuming that a sale is made at a profit) divided among 
the members. Issues of government, state and municipal bonds 
have often been bought by syndicates and immediately or 
very soon afterwards resold at high prices. 

Also see Reorganization. 



SMITH'S FINANCIAL DICTIONARY. 509 



T 



T. As printed on the tape by the stock ticker this letter 
means terminal, as terminal bonds. 

Table A. English term, meaning the regulations for the 
management of a limited company, contained in the first 
schedule to the Companies' act, 1862. 

Tack. As a speculative term tack means the direction in 
which a speculator's interest lies. Tack is used as a synonym 
for side. If, for instance, a speculator is said to be on or to 
have taken the long tack or bull tack on a stock or on the 
market it is meant that he is long of (in London bull of) a 
stock or of the market. On the other hand, if a speculator is 
said to be on or to have taken the short or bear tack on a 
stock or on the market it is meant that he is short of (in Lon- 
don bear of) a stock or of the market. 

The term tack is used not only in speculation in stocks, but 
in speculation in grain, cotton, coffee, etc. 

Tail-ender. A colloquial appellation for a small speculator 
who acquires an interest in one or more stocks as the move- 
ment in them is approaching its termination. 

Tailer. A colloquial appellation for a small speculator who 
tries to follow a large speculator or group of speculators in 
his dealings. 

Take in. London Stock Exchange term : when a bargain is 
continued or carried over the money lender or bear who buys 
the stock for cash and sells it again for the next settlement is 
said to take it in. He generally receives a contango rate from 
the bull, who "gives on" the stock ; but if the stock is so much 
oversold as to be scarce the taker-in pays the bull or lender of 
the stock a backwardation. 

Taken up. When a speculator who has bought a stock on 
margin pays for it in full he is said to have taken it up. 

On the London Stock Exchange a buyer takes up stock 
when instead of carrying over his bargain he pays for the 
stock and has it registered in his name. 



510 SMITH'S FINANCIAL DICTIONARY. 

Taker-in. London Stock Exchange term for one who takes 
in stocks — either a lender on stocks or a bear of the stock 
who has to borrow it. See Take in. 

Tale quale or tel quel rate. In foreign exchange dealings 
a tale quale or tel quel rate is a net rate. It includes commis- 
sion, brokerage, or in short, every charge, so that the rate is 
the total rate or price, to which there can be no addition. 

Talon. English term for a certificate attached to a bond 
entitling the holder of the bond to a new set of coupons. 

Tape. The ribbon of white paper on which the ticker (in- 
dicator) prints quotations of stocks, grain or cotton, etc. 

Tape price. The price of a stock or bond as printed by the 
ticker (indicator) on a paper tape. 

Tare. The deduction from the gross weights of goods of 
the weight of the receptacle, such as box, cask or sack. 

Tariff. A schedule or list of prices or rates. For instance, 
the tariff of a hotel is the schedule or list of prices at which it 
provides accommodations. Again, the tariff of a railroad is 
the schedule or list of rates at which it carries freight and 
passengers ; likewise, the tariff of a telegraph company is the 
schedule or list of rates at which it transmits messages. 

Also, the tariff is the schedule or list of merchandise and 
other articles with the rates of duty to be paid on them to the 
government when imported (and in some instances when ex- 
ported). 

Tax. A contribution exacted compulsorily from persons, 
property or business for the support of the government. 

Tax bond. A kind of bond issued by a state and receivable 
by it in payment of taxes. 

Tax-free. Not subject to taxation. 

Tax on a national bank. See National bank tax. 

Technical conditions or a technical market. Technical con- 
ditions exist in a stock when the price is raised by manipula- 
tion — by force of buying orders given and executed for the 
purpose ; or such conditions exist when the price is lowered 
by manipulation — by force of selling orders given and execut- 
ed for the purpose. Also, technical conditions exist in a stock 
when the price rises in consequence of enforced covering of 
short contracts (enforced buying by speculators who had sold 



SMITH'S FINANCIAL DICTIONARY, 511 

stock which they did not possess) or such conditions exist 
when the price falls in consequence of enforced selling of long 
stock (stock which had been purchased with the intention of 
selling at an advanced figure.) 

A technical market exists when prices as a whole are raised 
or lowered, as the case may be, by manipulation ; also a tech- 
nical market exists when an oversold condition compels cover- 
ing of short contracts with a consequent rise in prices or when 
an overbought condition compels liquidation or sale of long 
stocks with a consequent fall in prices. 

Telegraph frank. It confers the privilege of sending and 
receiving messages by telegraph free of charge ; when this 
privilege is accorded the telegraph company supplies a book 
of stamps, each stamp being good for the transmission of so 
many words (twenty usually). 

Telegraphic transfer. An order communicated by tele- 
graph from one place to pay money at another place. 

Telegraph pass. Same as telegraph frank ; it confers the 
privilege of sending telegraph messages free of charge over 
the wires of the company issuing it. 

Teller. The clerk in a bank who pays out money or the 
clerk who receives deposits. The paying teller is generally 
called first teller and the receiving teller is generally called sec- 
ond teller. The note teller in a bank is sometimes called the 
third teller ; his particular business is to attend to the collec- 
tion of promissory notes and drafts. 

Tel quel or tale quale rate. In foreign exchange dealings 
a tel quel or tale quale rate is a net rate. It includes com- 
mission, brokerage, or in brief, every charge, so that the rate 
is the total rate or price, to which there can be no addition of 
any kind. 

Tender. An offer for ; a bid for. 

In Great Britain tenders are sometimes invited for new is- 
sues of stock, chiefly first class securities, or Treasury bills. 
A minimum price is generally fixed and tenders at or above 
that price are invited. 

Ten per cent up. On the New York Stock Exchange when 
a stock is bought or sold at buyer's or seller's option a depos- 
it of 10 per cent by each party to the contract may be re- 
quired to insure the performance of the contract. 



51^ SMITH'S FINANCIAL DICTIONARY. 

Thin margin. Wall Street designation for a margin so 
small that it will provide for only a moderate adverse move- 
ment in the stock w^hich has been bought or sold. 

Third of exchange. For information see First, second and 
third of exchange. 

Third teller. This is a name sometimes applied to the note 
teller in a bank ; his particular business is to attend to the col- 
lection of promissory notes and drafts. 

Thirty. A bill of exchange payable in 30 days is often 
called a thirty ; plural, thirties. 

Three. On the New York Stock Exchange stocks sold "at 
3" are delivered by the seller to the buyer on the third day 
after the transaction, without an option for an earlier delivery. 

Three and a shilling, A member of the New York Stock 
Exchange is permitted to do business for another member at 
a commission of 1-32 per cent for buying and the same for 
selling — at three and a shilling, or in other words, at $3.12 1-2 
per TOO shares of stock of the par value of $100 each or 10 
bonds of the par value of $1,000 each. The charge to a person 
not a member is 1-8 per cent or $12.50. 

Through the clearing house. This term is applied to the act 
of a bank in presenting at the clearing house its claims 
(checks, drafts, etc.) against other banks — the claims are put 
through or sent through the clearing house for collection. 

When a check reads that it is payable through the clearing 
house it means that the check is not to be presented directly 
to the bank upon which it is drawn and the amount of it col- 
lected in cash, but that it is to be deposited in another bank 
which will send it through the clearing house for collection. 
This form of check was devised in 1893 when there was such a 
scarcity of actual currency (money) that it commanded a 
premium. The banks could not meet the demands upon them 
for currency and loan certificates were employed by them 
instead of currency in settling balances at the clearing house. 
By requiring checks to be sent through the clearing house the 
payment of them in actual money was avoided. 

The scheme worked so well that it was continued after the 

*dearth of currency terminated, with the object, which it 

accomplished, of reducing cash payments at the banks to a 



SMITH'S FINANCIAL DICTIONARY. 513 

minimum. The banks did not rigidly adhere to the rule that 
checks must be sent through the clearing house, but they 
promoted the practise by having "through the clearing house" 
printed on the blank checks which they supplied to customers 
and by requesting customers who used specially designed 
and printed checks of their own to do likewise. 

Through the Treasury. This term is applied to transfers of 
funds by a bank in one city to a bank in another city through 
the United States Treasury. 

If a bank in New York desires to send $500,000 to a bank 
in Chicago it will deposit the money in the Sub-Treasury in 
New York and will receive a check payable (always in the 
same kind of money or the kind of money for which the 
money deposited is exchangeable) at the Sub-Treasury in 
Chicago. The check is sent by mail to the Chicago bank. 

If, however, a telegraphic transfer is desired the Sub-Treas- 
ury will telegraph (through the Treasury at Washington) to 
the Sub-Treasury in Chicago to make immediate payment. 
A memorandum order for the money is then forwarded by 
mail by the Sub-Treasury in New York to the Sub-Treasury 
in Chicago for use as a record of the transaction. 

Thrown out of loans. A Wall Street term ; securities which 
are not accepted by lenders of money as collateral are said to 
have been thrown out of loans. Usually when securities are 
rejected as collateral it is because of their unmarketable char- 
acter or because of uncertainty as to their value. 

Ticker. The popular name for the indicator, the machine 
operated by electricity which prints the quotations of stocks, 
grain or cotton, etc., on a paper tape. 

When the price alone follows the letters standing for 
the name of a stock it is understood that the amount sold 
was 100 shares (or in the case of bonds, 10 bonds). Thus, RG. 
75 means that 100 shares of Reading were sold at 75. When 
more or less than 100 shares (or in the case of bonds, more or 
less than 10 bonds) are sold the number of shares (or bonds) 
precedes the price, thus: RG. 200.75.10.75. An ofifer alone, 
without a bid, is preceded by an O and a dot, thus : RG. O. 
75. A sale and an oi¥er is recorded (printed) thus : RG. 75. O. 
75. A bid alone, without an offer, is followed by the letter B, 
thus : RG. 75. B. A bid and an offer are separated by @, thus : 



514 SMITH'S FINANCIAL DICTIONARY. 

75@i-2 meaning that 75 was bid and the stock was offered at 
75 1-2. (On some tickers three dots . . . are used in place of 
@). When the sale is not recorded (printed) in its proper 
place the price is preceded by the abbreviation SLD., 
thus : RG. SLD. 75. When the amount sold and the price are 
so nearly alike that they may be taken for two sales the 
amount of the sale is followed by the letter S and a dot, thus: 
RG. 73. S. 75, meaning 73 shares at 75 ; or SIL. 60. S. 61. mean- 
ing 60,000 ounces at 61. 

When an error has been made by the reporter or in print- 
ing the last letter or figure is repeated several times, indicat- 
ing that the quotation is to be thrown out, thus : RG. 75J i 2 i- 
Three-day contracts (contracts maturing in three days) are 
printed thus : RG. 200.75.3. A transaction buyer 4, 10, 20, 30 
or 60 is recorded (printed) thus : RG. 75. B4 (or 10, etc.), mean- 
ing that the stock sold at 75, receivable by the buyer in 4 
days (or 10 days, etc.). A transaction seller 4 (or 10, etc.) 
when the stock is deliverable by the seller in 4 days (or 10 
days, etc.) is recorded (printed) in the same manner, with 
the letter S substituted for the letter B. 

When * is printed it denotes that the quotation it follows 
is correct. 

Tickerosis. A slang term for the mania of a speculator to 
hang over the ticker, the instrument operated by electricity 
which prints upon a paper tape the quotations for stocks, grain, 
cotton or other speculative commodities. 

Ticket. In transactions on an exchange brokers use de- 
liver and receive tickets. A deliver ticket and a receive ticket 
are sent by the seller to the buyer. The buyer keeps the re- 
ceive ticket and stamping or writing an acknowledgment on 
the deliver ticket returns it. The operation is called compari- 
son and it is confirmatory of the transaction between the two 
brokers. 

In trade the term ticket means brand, that is, a brand of 
goods or a particular product. 

For the meaning of the term ticket on the London Stock 
Exchange see Name day. 

Ticket day. Same as name day ; see Name day. 

Tickler. A name given to a book kept in a bank which 
shows the debts owing to the bank and the days of payment. 



SMITH'S FINANCIAL DICTIONARY. 515 

This book derives its name from the fact that it serves as a 
reminder as to wlien paper falls due. 

Tierce. A cask of lard containing 340 pounds. Quotations 
for lard are so much per 100 pounds. To ascertain the value of 
a tierce a quotation must be multiplied by 3 2-5 or decimally 

by 34- 

Time (New York Stock Exchange). A designation for 2.15 
p. m., when the time has expired for the delivery of securities 
in settlement of contracts entered into on the New York Stock 
Exchange which matured on the current day. For additional 
information see Hammond's time. 

Time bargain. London Stock Exchange term for a bargain 
(contract) due for the new account, as opposed to a bargain for 
cash or for current account. 

Time bill. A bill of exchange (draft) or promissory note 
payable at a specified future date. 

Time draft. A draft payable at some specified future time. 

Time limit. No contract on buyer's or seller's option which 
extends beyond 60 days is permitted on the New York Stock 
Exchange. 

Time loan. Wall Street designation for money borrowed 
for a specified period, usually not less than 30 days nor more 
than six months, the repayment of which is secured by the 
deposit of collateral (stocks and bonds) with the lender. 

It is a common practise for stock brokers to borrow money 
on time and to lend on call so much of what they have bor- 
rowed as they haA^e not immediate use for. Should a broker, 
for instance, borrow $500,000 and have use for only $250,000 he 
would lend on call the remaining $250,000. Should he require 
for his own use more than $250,000 he would call in as much 
of the $250,000 outstanding as he might need. Thus, the 
money w^hich he might not have use for would not be idle but 
would be earning something. It might not earn as much in 
interest as the broker had to pay for it, but he would be sure 
of having money when he needed it. 

But there is a possibility that it might earn in interest more 
than the broker had to pay in interest for it, for in a stringency 
in money the rate for call loans goes very high. Many times 
it has' gone to 3-4 of i per cent "and interest," which is equiva- 
lent to the rate of 279 3-4 per cent a year. The 3-4 per cent 



5i6 SMITH'S FINANCIAL DICTIONARY. 

is the premium paid on the money and the interest is at the 
legal rate, which in New York state is 6 per cent. The 
premium is not paid each day while the loan stands, but is a 
premium paid for obtaining the loan. But the loan might be 
called (the return of the money demanded) the next day, in 
which case the borrower might have to pay the same premium 
for a renewal of it with the same lender. 

There are times in the year when money is less abundant 
than at other times. For instance, money becomes more or 
less scarce as the end of June approaches and again as the end 
of December approaches. At these times money is being accu- 
mulated for the heavy interest payments due in the first in- 
stance on July I and in the second instance on January i. 

Again, as the grain and cotton crops approach maturity 
money flows from the money centres to the regions where 
these crops are grown to pay for them. Until this money 
begins to find its way back to the money centres money is not 
in plentiful supply and has in many years been scarce. It is 
the custom of brokers before this outflow to the crop regions 
begins to borrow on time — for three or four months — to make 
sure of an adequate supply while money is in large use in pay- 
ing for the crops, or to employ the common expression, while 
it is in use in moving the crops. Money to move the crops gen- 
erally begins to flow from the East to the West and South 
the latter part of August and the outflow generally continues 
until the fore part of November. It hardly begins to return, 
in volume, until December. 

Also, when gold is being exported money is likely to be 
difficult to obtain. Accordingly, if, the brokers see signs of 
gold exports they prepare for stringency or emergency by 
supplying themselves with time money — by negotiating time 
loans. 

By the rules of the New York Stock Exchange a time loan 
must be paid before or at 2.15 o'clock on the day on which it 
becomes due ; this also is the rule of lenders generally. 

Also see Call loan. 

Time money. A loan of money for a specified time. See 
Time loan. 

Time note. A promissory note payable at some specified 
future time. 



SMITH'S FINANCIAL DICTIONARY. 51T 

Time paper. A promissory note, draft or other instrument 
payable at a specified future time. 

Tinkering. When new financial legislation is proposed the 
opponents of the measure presented denominate it tinkering 
the finances ; likewise, when new tariff legislation is proposed 
opponents of the measure presented denominate it tinkering 
the tariff. Tinkering, as a colloquialism, means to mend or 
patch in the manner of a tinker — that is, in a makeshift fashion ; 
sometimes, to botch. 

Tip. A Wall Street colloquialism ; same as point ; advance 
information or a suggestion of supposed value. 

Tipster. A Wall Street colloquial appellation for one who 
imparts tips or points ; same as pointer. 

Title. Title to property does not pass from one to another 
unless there is a mutual agreement to that effect. 

If an agent has goods in his possession the title is still in the 
principal, although the agent may have advanced a larger or 
smaller proportion of their value. If he is not an agent but 
has simply advanced money on the security of the goods he 
has a lien upon them for his advance, but he does not own 
them. In the absence of an agreement an agent who has made 
an advance upon goods has a lien upon them to that extent. 
A creditor of the owner may take the goods and sell them sub- 
ject to his lien. 

Tqi account. To account means to render a report or state- 
ment ; to make an accounting. 

To arrive. Anything bought to arrive is bought with the 
provision that it shall arrive (and be delivered) at or within a 
specified time. 

To bearer. A check payable to bearer is payable to who- 
ever may hold it. No indorsement on it is necessary. Instead 
of making a check read "Pay bearer" it is a common practise 
to make it read "Pay cash" or "Pay currency." 

A promissory note or any order for money may be made 
payable to bearer. 

Token money. Any metal money not as bullion worth its 
face value. Formerly the term applied to a metal tablet in the 
form of a coin issued by tradesmen and others as evidence 
of an amount due, as stated thereon, by the issuer to the 
holder. 



5i8 SMITH'S FINANCIAL DICTIONARY, 

Tolerance. Same as mint remedy ; the extent to which coins 
may be abraded (reduced in weight by abrasion) or otherwise 
worn and still be redeemable at the Treasury at their face 
value. 

The law says that any gold coins of the United States re- 
duced in weight by natural abrasion not more than 1-2 of I 
per cent after a circulation of twenty years, as shown by the 
date of coinage, and at a ratable proportion for any period less 
than twenty years, shall be received at their nominal value by 
the United States Treasury. 

The tolerance on silver and base metal coins is unlimited; 
the Treasury will receive them at their face value until abra- 
sion or wear has obliterated the inscriptions on them. 

The term tolerance or mint remedy also applies to the allow- 
ance for a slight difference in the fineness of gold or silver 
from the government standard. In gold the limit of difference 
above or below is one-thousandth ; in silver it is three-thou- 
sandths. 

Mutilated coins, either gold, silver, nickel or bronze, are 
worth only their bullion value, or in other words, are worth 
only the commercial value of the metal of which they are 
composed. 

Ton-mile cost. A railroad term, meaning the average cost 
per mile of carrying each ton of freight. 

Ton miles. A railroad term ; the whole number of miles the 
whole number of tons was hauled. The result attained by 
adding together the number of miles each ton was hauled and 
then dividing by the number of tons shows the average num- 
ber of miles each ton was hauled (transported). Ton mileage 
means the same as ton miles. 

Tonnage. Freight in tons. For instance, the tonnage of a 
railroad or other carrying line is the number of tons it hauls 
or transports. 

Also, tonnage means the carrying capacity of a vessel. 

To order. A pecuniary instrument so made out calls for 
payment to the holder to whom it has been properly indorsed ; 
when goods are shipped to order the consignee is subsequently 
to be named. 

A check made payable to a person or to a person or order, 
as to Richard Smith or to Richard Smith or order, must be 



SMITH'S FINANCIAL DICTIONARY. - 5^9 

indorsed with the name of that person before it is collectable. 
The name of the person must be written across the back of the 
check, Avhich, when the name stands thus alone, makes the 
check payable to bearer, or the check must be formally as- 
signed to another on its back by the one in whose favor it is 
drawn. 

In Great Britain checks payable to order are similar in effect 
to those payable to bearer in the United States. In Great 
Britain when a bank or banker has paid in good faith in the 
ordinary course of business a check drawn on it or him it is 
not incumbent on it or him to show that the indorsement of 
the payee or any subsequent indorsement was made by or 
under the authority of the person whose indorsement it pur- 
ports to be and the bank or banker is deemed to have paid the 
bill in due course, although such indorsement has been forged 
or made without authority. 

Tout. Colloquial appellation used in England for a person 
who gets business by means of push and self-advertisement ; 
usually applied to one who gets business by these means for 
others and is paid a commission on the business attracted. 

To whom it may concern. To whomsoever is interested, 
pecuniarily or otherwise. 

TR. As prmxted on the tape by the stock ticker these letters 
mean trust receipts (receipts for securities held in trust). 

Trackage. When one railroad obtains, by contract, the 
right to run its trains over the line of a second railroad it is 
said to have obtained trackage or trackage rights on the 
second railroad. 

Trade. Buying and selling for gain ; mercantile traffic. 

In its larger sense the term trade means the same as com- 
merce ; the exchange of goods products or property of any 
kind, especially such exchange between states and nations. 

Also, a trade is a complete transaction ; buying and selling or 
vice versa. 

Trade balance. See Balance of trade. 

Trade bill. London term for a domestic commercial bill. 
See Commercial paper. 

Trade dollar. The act of February 12, 1873, authorized the 
coinage of a silver dollar, designated as a trade dollar, weigh- 
ing 420 grains, .900 fine, that is, nine-tenths silver and one- 



520 SMITH'S FINANCIAL DICTIONARY. 

tenth alloy (copper). This was 7 1-2 grains heavier than the 
standard silver dollar. 

Any owner of silver bullion was privileged to deposit it 
in a mint to be coined into trade dollars. These dollars were 
intended for trade with China and Japan in competition with 
the Mexican silver dollar which was a trifle less valuable. The 
same act made all silver coins legal tender to the amount of 
$5 and this was construed to include the trade dollar. By 
joint-resolution of Congress on July 22, 1876, the legal tender 
quality of the trade dollar was abrogated and the Secretary 
of the Treasury was authorized to limit the coinage of it to 
such an amount as he might deem necessary to meet export 
demands. Coinage of the trade dollar was entirely discon- 
tinued February 22, 1878, except for proof pieces. 

The act of March 3, 1887, provided that for a period of six 
months thereafter trade dollars not defaced, mutilated or 
stamped should be redeemed at their nominal (face) value in 
standard silver dollars or subsidiary coin and that the dollars 
so redeemed should be recoined into standard dollars or sub- 
sidiary coin. The same act repealed all authority to coin trade 
dollars and those not redeemed in the specified time have 
now only a bullion value. 

It was not intended that the trade dollar should circulate in 
the United States at all, but when the price of silver fell so 
that 420 grains were worth less than a gold dollar it became 
profitable for owners of silver to have it coined into trade 
dollars for circulation at home. Then Congress took away 
the legal tender quality of the trade dollar. 

Trade-mark. Any symbol, mark, name or other character- 
istic or arbitrary indication adopted or used, as by a manu- 
facturer or merchant, to designate the goods he manufactures 
or sells and to distinguish them from the goods of com- 
petitors. 

The word ''trade-mark" can be used without registering it 
and such use does not prevent or invalidate registration sub- 
sequently. A trade-mark is not in this respect like a copy- 
right or a patent right. No one has the exclusive right to 
publish his own Avorks or to manufacture his own inventions 
unless he establishes his right under certain acts of Congress. 

The exclusive right to a trade-mark does not depend upon 



SMITH'S FINANCIAL DICTIONARY. 521 

any legislative act. The courts will punish fraudulent use of 
a trade-mark, even if the real owner has not registered it or 
even if the person using it fraudulently has registered it. 
Registration confers no right; it serves merely as a notice of 
claim of ownership. It is proof of title which will avail if 
there is not stronger proof to the contrary. 

Trade money. Money coined in one country for trade with 
another country. The trade dollar of the United States was 
trade money; see Trade dollar. 

Trade paper. English term for domestic commercial paper ; 
specifically for promissory notes given by merchants for goods 
purchased or drafts drawn on merchants in collection of pay- 
ment for goods purchased by them. 

Trade price. The price charged by a wholesaler of goods 
to a retailer who sells again at a higher price. 

Trader. One who buys and sells. One who makes a busi- 
ness of speculation in stocks or commodities is often desig- 
nated as a trader. Also, a vessel employed in any particular 
trade (as the East Indian trade) is called a trader. 

Traffic. As a commercial term traffic means business or 
trade. As a transportation term it means the business of a 
railroad or other carrying line. The term also applies to the 
business of a telegraph or a telephone company. 

Traffic density. A term used in railroad accounting, mean- 
ing the result obtained when the number of passengers carried 
one mile is divided by the number of miles of road operated 
and the number of tons of freight carried one mile is divided 
by the number of miles of road operated. 

Trailer. A colloquialism ; same as tailer ; a small speculator 
who tries to follow a large speculator or group of speculators 
in his speculations. 

Train miles. A railroad term ; the number of miles tra- 
versed by a particular train ; or, the number of miles collec- 
tively, traversed by all trains of a railroad. The result at- 
tained by adding together the number of miles traversed by 
all trains on a railroad and dividing by the number of trains 
shows the average number of miles traversed by each train. 
Train mileage means the same as train miles. 

Transaction. A sale — a purchase. 

Transcontinental or Pacific railroads. Atchison, Topeka 



522 SMITH'S FINANCIAL DICTIONARY. 

& Santa Fe ; Great Northern, Northern Pacific, Southern 
Pacific, and Union Pacific. 

Transfer. The act of placing a certificate of stock or a 
registered bond in the name of a new owner. 

The new owner of a stock which is in receipt of dividends 
or of a registered bond upon which interest is paid should 
have it transferred into his name before the closing of the 
transfer books for a dividend or for interest for the check for 
the dividend or interest will be sent to the person in whose 
name the stock or bond stands. 

Transfer agent. An agent through whom stock may be 
transferred from the name of one owner to the name of an- 
other. Each stock company has its own transfer office or it 
appoints as a transfer agent a bank, trust company, firm or 
individual. 

Transfer day. A name for the regular day for registering 
transfers of bank stock and government funds at the Bank of 
England. 

Transfer deed. London legal and stock exchange name for 
a deed signed by the buyer and seller by which registered 
stocks or shares are legally transferred by the latter to the 
former. 

Transfer office. The place where stock may be transferred 
from the name of one owner to the name of another. Each 
stock company has its own transfer office or it appoints as a 
transfer agent a bank, trust company, firm or individual. 

Transferred in blank. Same as assigned in blank; see As- 
signed in blank. 

Transmissioin of securities. See Investment securities. 

Traps. A Wall Street colloquialism meaning worthless 
securities ; same as cats and dogs or junk. 

Traveler's check or cheque. A check for a specified amount 
issued by a banker and payable by any correspondent of the 
banker. The traveler purchases a number of these checks for, 
say, $50 each and indorses each as he presents it for payment. 
These checks are largely used in place of letters of credit. 

Traveler's letter of credit. The name commonly used for a 
circular letter of credit ; see Circular letter of credit. 

Treasurer. The officer of a corporation who receives, cares 
for and disburses revenues. 



SMITH'S FINANCIAL DICTIONARY. 523 



Treasurer of the United States. The officer of the Treasury 
Department who receives and keeps money belonging to or in 
the custody of the government and who makes disbursements 
on warrants or drafts. 

Treasury bill. English ; practically a government promis- 
sory note, payable in 3, 6, 9 or 12 months. 

When the treasury is in need of money for current expenses 
it sells its bills (paper) at a discount the same as would a 
merchant in -need of funds. Tenders (bids) are invited for 
the bills and the best offers are accepted. ]\Iost of the English 
floating debt is in the form of treasury bills. Treasury bills 
are also issued by India and some British colonies. 

Treasury note. A note (money) issued by the United States 
Treasury in payment for silver bullion purchased under the 
so-called Sherman act or silver-purchase act passed July 14, 
1890. 

An important clause of this act was the one declaring it to 
be the ''established policy of the United States to maintain 
the two metals (gold and silver) on a parity with each other 
upon the present legal ratio (15.988 to i), or such ratio as may 
be provided by law." In order to comply with the law it was 
necessary when Treasury notes were presented for redemption 
to pay on demand either gold or silver as the holder of the 
notes might prefer. A refusal to do so would have made the 
notes silver notes. 

The notes are in denominations of $1, $2, $5, $10, $20, $50, 
$100, $1,000 and are redeemable in coin at the Treasury and at' 
Sub-Treasuries ; are exchangeable for all kinds of money ex- 
cept gold certificates and are unlimited legal tender except as 
otherwise contracted. 

The amount of silver bought with Treasury notes during 
the three years before ^the repeal of the purchasing clause of 
the act on November i, 1893, was 168,674,682 fine ounces at a 
cost of $155,931,002 (an average of $0.92.44 per ounce), which 
represents the total of the note issue. The bullion purchased 
was held as security for the notes. Up to August, 1893, the 
notes presented for redemption were reissued whether they 
were paid in gold or silver. Since that date all notes redeemed 
in silver have been canceled and the bullion so released as 
securitv has been coined into silver dollars or subsidiarv coins. 



524 SMITH'S FINANCIAL DICTIONARY, 

Under the act of March 14, 1900, Treasury notes redeemed in 
gold are reissued only in exchange for gold deposited. Of the 
total issue only a small part now remains in existence. 

The name Treasury notes was also applied to two issues of 
legal tender notes emitted by the United States government 
early in the Civil War. One series bore simple interest, some- 
times 5 per cent and sometimes 6 per cent, and the notes had 
a definite period of payment. The 5 per cent notes had interest 
coupons attached. The other series consisted of compound- 
interest notes. These were payable in three years from date, 
with interest at 6 per cent compounded semi-annually and pay- 
able at maturity. On the back was printed a statement show- 
ing the value at the end of each six months. Neither of these 
issues was a success as a circulating medium, the accruing m- 
terest naturally causing them to be hoarded. 

Trial of the pyx. The test of the fineness and weight of 
coins reserved from each new minting for the purpose. The 
receptacle for the coins so reserved or selected is called the 
pyx. 

Triangular operation in exchange. An operation in which 
three places are involved. For additional information see 
Arbitration of exchange. 

Triangular operation in gold. An operation in which three 
places (or three countries) are involved. As an example, an 
order may be sent from Paris to New York for the shipment 
of gold to Paris. If London is indebted to New York New 
York may order the amount of gold sent from London to 
Paris instead of sending it from New York. Thus, a large part 
of the transportation charges, insurance and interest while in 
transit is saved. 

London often meets obligations in New York by ordering 
the forwarding of gold from Australia where London has a 
credit. On arrival in San Francisco the gold is deposited in 
the mint there which issues for it a receipt or check payable 
in gold at the Sub-Treasury in New York. Thus, the trans- 
portation of the gold across the continent is avoided. 

For additional information see Gold exports and imports. 

Trip pass. A ticket entitling the holder to a free ride be- 
tween the points named in it on a railroad (or a steamboat or 
other conveyance). 



SMITH'S FINANCIAL DICTIONARY. 525 

True discount. If interest is deducted at the time a loan is 
obtained it is called true discount if the amount received plus 
the interest equals the amount to be paid at the maturity of 
the obligation. 

True exchange. True exchange requires at least three par- 
ties. For instance, A in New York owes £1,000 to B in Lon- 
don, while C in London owes £1,000 to A in New York. A, 
therefore, draws on C in favor of B — in other words, A sends 
to B an order on C for the £1,000. 

As an illustration of a more extended operation, A in New 
York owes £1,000 to B in London. C in Liverpool owes 
£1,000 to D in Chicago. D draws on C and sells the draft (bill 
of exchange) to A who forwards it to B who collects the 
amount of it from C (or what amounts to the same thing, 
sells the draft to a banker in London who makes collection). 

Trunk lines. The railroads designated as the trunk lines 
are the Baltimore & Ohio, Delaware, Lackawanna & West- 
ern, Erie, Grand Trunk, Lehigh Valley, New York Central 
& Hudson River, New York, Ontario & A¥estern, Pennsyl- 
vania, West Shore. 

Trust. The term trust means credit; that is, confidence 
that payment, especially voluntary payment, will be made at 
a future time for goods or other property purchased. 

The word trust also signifies custodianship and care of prop- 
erty. 

The term trust is commonly applied to a combination of 
separate concerns or interests by an actual consolidation when 
the purpose is to control a particular industry or a business. 

For example, by a consolidation or amalgamation of steel 
producing companies the "Steel Trust," so called, was created ; 
likewise, by a combination of sugar refining companies the 
"Sugar Trust," so called, was created. 

Probably the most remarkable economic and industrial de- 
velopment of- the closing years of the nineteenth century and 
the opening of the twentieth has been the rise and growth of 
what have come to be popularly known as trusts. As applied 
to a great combination of capital brought together for the pur- 
pose of controlling or dominating an industry the term found 
its origin in the manner in which the original combinations 



526 SMITH'S FINANCIAL DICTIONARY. 

were formed. Rival producers of, for example, oil entered into 
an agreement to work harmoniously together, eliminate dis- 
astrous competition, and take advantage of the economies pos- 
sible from centralized management. In order to make the 
agreement binding and avoid any possibility of its being 
broken the plan was devised of turning the stock of the various 
concerns involved over to trustees, who in turn issued to the 
original stockholders their receipts or certificates. The man- 
agement of the properties then devolved upon the trustees 
and harmony and centralization of authority were assured. 
The properties being thus held in trust it was not long before 
the aggregation became known as a "trust." xA.lthough this 
particular form of combination was soon found to be unsatis- 
factory and impracticable and eventually was superseded by 
the more simple and direct method of outright purchase of the 
combining interests by huge corporations organized for the 
purpose the name "trust" is still applied to all such combina- 
tions. 

Trusts have given rise to the most violent controversies, 
economic, legal and political. In the view of those who ap- 
prove and believe in trusts they are but a natural evolution de- 
manded by economic laws and beneficial to the body politic. 
Their existence and growth is explained as merely another step 
in the process by which individual effort has been replaced by 
combined effort in all branches of human activity. The time 
was when primitive man individually worked out his own 
existence. He raised his own food or obtained it by hunting, 
he built his own hut, made his own clothes, and hewed his own 
dugout which he propelled by his own strength. Now, his 
labor is specialized and by the fruits of it and the co-oper- 
ation of his fellow-men he obtains his food and his clothing 
from the far corners of the earth, he lives in a house built by 
many hands, and speeds across the Atlantic in five days in a 
steamship which required the united labor of thousands to 
assemble and build and hundreds to operate. All this has been 
made possible by the relinquishment of individual independ- 
ence and the growth of mutual confidence and interdepend- 
ence among men. 

Just as machinery on a vaster and vaster scale has displaced 



SMITH'S FINANCIAL DICTIONARY. 527 

manual labor and made possible the wonderful physical de- 
velopment of the earth to-day, so, the advocates of trusts be- 
lieve, has cooperation in its political, industrial and commer- 
cial forms been the economic machinery by which civilization 
has been advanced. First came individual enterprise. Then, 
undertakings became larger and copartnerships involving two 
or three or perhaps half a dozen individuals were resorted to. 
Later, as the fields of enterprise still widened and the burdens 
of expense and management continued to grow, corporations 
sprang into being, combining the resources and energies of 
hundreds. And now, finally, great corporations have com- 
bined their strength in still huger proportions in what are 
known as trusts, carrying on the commercial and industrial 
activities of the world on a scale hitherto undreamed of. 

These successive steps in development are explained as not 
only a perfectly natural, but a necessary growth, if the best 
economic results are to be obtained. By concentration of in- 
terests better organization is obtained and the utilization of 
the best brains and broadest experience is made possible. 
Some of the other advantages, briefly summarized, are : Econo- 
my in production, resulting from the purchase of raw materials 
on a large scale, the use of the best machinery and processes, 
specialization of plant, and the utilization of by-products; 
economy in distribution, resulting from direct control of de- 
liveries from the nearest point of manufacture and the benefit 
derived in rates from large shipments ; economy in sale, re- 
sulting from the elimination of competitive expenses for ad- 
vertising, agents, offices, etc. ; economy in handling and stor- 
age, resulting from the adjustment of supply to demand by 
means of general oversight of the whole field, thus avoiding 
overproduction ; enlargement of the market, resulting from 
cheapened production and lower prices, thus making possible 
larger profits from smaller margins ; finally, better business 
conditions in general, resulting from stability of prices and 
the avoidance of rate-cutting and ruinous competition. 

On the other hand, opponents of the trusts see in them an 
immixed evil. From this point of view trusts stifle competi- 
tion by improper methods, tyrannize over their employes and 
•over the public, arbitrarily raise prices and curtail production, 



528 SMITH'S FINANCIAL DICTIONARY. 

corrupt legislators, foster speculation through overcapitaliza- 
tion, and exercise generally a power thought by many to be 
fraught with possible danger to the public good. In addition 
it is urged that they crush individual effort and shut off the 
avenues of independent enterprise and advancement. 

Trusts have been fought fiercely since their first inception, 
in the courts, in the legislatures, and in the public prints. In 
their original forms, whether as alliances, as agreements or 
as trusteeships, they were all declared illegal in this country 
by the courts. At the present time none exists here except in 
the form of full-fledged corporations owning either in full the 
stocks of the constituent companies or a controlling interest in 
each. In this form they have been able to withstand the at- 
tacks made on them and the opposition to them has very gen- 
erally resolved itself into efforts to devise methods for govern- 
mental supervision and oversight of their operations. In Eng- 
land and Germany, however, where the trust movement has 
been equally as marked as in this country, alliances and con- 
tracts are still a frequent form, having been protected by the 
courts. In other cases absolute fusion of competing busi- 
nesses has been effected as in this country. 

The Standard Oil Company is generally considered the par- 
ent of all trusts. It was organized in the trustee form in 1882. 
It was followed in this country by many others, notably the 
Sugar Trust and the Whiskey Trust. These trusteeships hav- 
ing been declared illegal by the courts reorganization into the 
corporation form was resorted to. Then came for several 
years a perfect avalanche of consolidations, culminating in the 
organization of the United States Steel Corporation in 1901 
with a total capitalization of more than $1,500,000,000. Merely 
to catalogue the list of such consolidations would occupy pages 
of this book. 

In England the pioneer trusts were the Salt Union and the 
United Alkali Company, followed in 1896 by J. & P. Coats, 
Limited, and scores of combinations in nearly every branch 
connected with the textile industries, also in iron, steel, ship- 
building, armor and gunwork, coal, borax, cement, fireclay, oil, 
dynamite, tobacco and many other commodities. 

In Germany perhaps the best known combination is the 



SMITH'S FINANCIAL DICTIONARY. 529 

Rhenish Westphalian Coal Syndicate, which controls 94 per 
cent of the West German mines, exclusive of those owned by 
the government. Every branch of the iron and steel industries 
is under control of a syndicate and similar organizations hold 
sway in sugar, salt, paper, alcohol, plush, dyes, cotton and 
other industries. 

The trust idea assumed international importance with the 
formation of the British American Tobacco Company, Limit- 
ed, a union of English and American tobacco trusts, and of the 
International Mercantile Marine Company (commonly called 
the Atlantic Ship Trust), a union of some of the largest Eng- 
lish and American shipping interests. 

The name trust is sometimes applied to a combination of 
separate concerns or interests by an understanding or a com- 
pact, as a pool, but not by an actual consolidation. To such a 
combination the term combination or combine properly applies. 

The term ring also is sometimes mistakenly used in place of 
the term combination or combine ; specificially the term ring 
applies to a clique or coterie of individuals and not to a com- 
bination of concerns or interests. 

Trust company. The banking law of New York defines a 
trust company as a ''corporation formed for the purpose of tak- 
ing, accepting and executing such trusts as may be lawfully 
committed to it, and acting as trustee in the cases prescribed 
by law, and receiving deposits of moneys and other personal 
property and issuing its obligations therefor, and of loaning 
money on real and personal securities." 

A trust company is not permitted to issue bills to circulate 
as money. It cannot lend money at more than the legal rate 
on time and is not obliged to keep a lawful money reserve. 
In New York state the law requires that the capital of the 
company shall be invested in bonds and mortgages on unen- 
cumbered real property (real estate) in the state worth at least 
double the amount loaned thereon or of any county or incor- 
porated city of the state duly authorized by law to be issued. 

The powers and privileges granted to a trust company are 
much greater than those granted to a bank, except that a trust 
company is not permitted to issue circulating notes. The 
principal business and profit of most trust companies is not, 



530 SMITH'S FINANCIAL DICTIONARY. 

despite the name, in acting as trustees, but instead is in bank- 
ing and financing. 

In Great Britain a trust company is one whose main business 
is investing and dealing in stocks and bonds of other com- 
panies. 

Trustee. A person who holds property in trust for another 
or for creditors. 

Trustee process. The name in Massachusetts for garnish- 
ment, which is the attachment for debt of money or property 
while in the hands of a third party. 

Trustee stock. A stock of the highest class in which trus- 
tees are authorized by law to invest. 

Trust officer. The trust officer of a trust company is the 
officer who has immediate charge of matters in which the com- 
pany acts as trustee. 

T. T. Telegraphic transfer ; refers to the transfer of money 
by telegraph. 

Turn. A Wall Street term for a complete transaction. The 
sale of a stock already purchased constitutes a turn, as does 
the purchase of a stock alrejidy sold short. 

Also- see Jobber's turn, a London Stock Exchange term. 

Turned down. A trade term ; when a bid (offer) for goods 
is said to have been turned down it is meant that it was re- 
jected. 

Turn of the market. Wall Street term for the point at 
which the stock market changes its course. 

On the London Stock Exchange the jobber (who is prac- 
tically a wholesaler) will buy at one price or will sell at an- 
other. The price midwa}^ between that at which he will buy 
and that at which he will sell — and he will do either — is called 
the middle price ; the jobber expects to undo or cover his bar- 
gain by a fresli bargain with another jobber at the middle 
price; the turn of the market is the difference between the 
middle price and the price at which the jobber bought or sold. 

Turn over. The total value of the purchases, sales or other 
transactions of a business concern in any particular period. 
For instance, the year's turn over of a concern is the total busi- 
ness of the concern for the year. 

Twisting the shorts. A Wall Street colloquialism which 



SMITH'S FINANCIAL DICTIONARY, 531 

means the act of advancing prices on the shorts (bears) by 
manipulation. 

Two-dollar broker. A member of the New York Stock Ex- 
change who executes orders for other members for $2 per hun- 
dred shares and whose participation in transactions ends with 
the simple act of buying or selling. 

Two-name paper. Same as double-name paper ; paper that 
is indorsed. The term double-name paper is commonly used. 

Two Sundays in one week. Railroads in making weekly re- 
ports of earnings count the first seven days as the first week, 
the second seven days as the second week, the third seven 
days as the third week and the remaining days of the month 
as the fourth week. In a month of 30 days the fourth week 
consists of nine days and in a month of 31 days it consists of 
ten days. Thus, the fourth week may contain two Sundays. 

For additional information see Railroad earnings. 

TX. As printed on the tape by the stock ticker these let- 
ters mean tax. 



U 



U. K. These letters signify the United Kingdom of Great 
Britain and Ireland. 

UN. As printed on the tape by the stock ticker these let- 
ters mean unified, as unified bonds. 

Unassented stock or bonds. Stock or bonds which the 
owners refuse to deposit under an agreement by which their 
status will be changed. For additional information see Re- 
adjustment. 

Unauthorized clerk. One who, . although admitted to the 
London Stock Exchange, is an attendant only on the member 
of the exchange by whom he is employed ; his presence is for 
the purpose of checking (making and comparing memoranda 
of) bargains (contracts). An authorized clerk is authorized 
by the committee for general purposes of the exchange to 
transact business on the exchange for his employer. 



53^ SMITH'S FINANCIAL DICTIONARY, 

Uncovered notes. Money in the form of notes that are not 
backed by gold or silver or other security. 

Uncurrent securities. Those not frequently dealt in and 
especially those not dealt in on an exchange. 

Under. On the London Stock Exchange under a figure or 
fraction (sixteenth) means 1-32 under. Under 9-16 means 
17-32. 

Underlying bond. A bond issued under a mortgage an- 
terior and prior in claim to another mortgage; see Underlying 
mortgage. 

Underlying mortgage. A mortgage anterior and prior in 
claim to another mortgage, as, for instance, when speaking of 
a second mortgage the first mortgage is the underlying mort- 
gage. 

Under the rule. On the New York Stock Exchange when a 
member of the exchange fails to receive or deliver stock, ac- 
cordingly as he has bought or sold, the stock in question is 
bought or sold, as the case may be, by the chairman of the ex- 
change for the account of the delinquent member, who is 
charged with any difference in price. 

Uncompleted transactions of failed members are closed un- 
der the rule. Disputes frequently result in sales or purchases 
under the rule, the final settlement of the matter being de- 
termined by the proper committee of the exchange. 

Undertone. In its application to the stock market the term 
means underlying or inherent strength or weakness, as the 
case may be. 

Underwriter. One who insures ; a member of an underwrit- 
ing syndicate. For additional information see Syndicate. 

Underwriting. Insuring, as insuring or guaranteeing that 
new issues of stocks or bonds shall be subscribed for. For 
additional information see Syndicate. 

Underwriting syndicate. See Syndicate. 

Undoing a bargain. London Stock Exchange term ; a job- 
ber who has bought from or sold to a broker undoes or cov- 
ers the bargain by a fresh purchase or sale, generally with 
another jobber who has dealt with another broker. 

Unfavorable (foreign) exchange conditions. See Favorable 
and unfavorable (foreign) exchange conditions. 



SMITH'S FINANCIAL DICTIONARY. 533 

Unfunded debt. Floating debt ; see Floating debt. 

Unified bonds. Another name for consolidated bonds or 
consols ; an issue of bonds created to unify or consolidate or 
refund (take up and replace) two or more previous issues. 

United States note. A particular form of paper money is- 
sued by the United States and based simply on the credit of 
the country (not issued against gold or silver on deposit) ; 
often called greenback (because the back is printed in green) 
and also legal tender or legal tender note. 

United States notes were authorized by various acts of 
Congress passed at the time of the Civil War and were vir- 
tually a forced loan. Some of the earlier issues were con- 
vertible into bonds, but this provision was abrogated on July 
I, 1863. The highest amount at any time outstanding was 
$449,338,902 on January 3, 1864. The original intention was 
to redeem the notes and cancel them and by December 
31, 1867, the amount outstanding had been reduced to $356,- 
000,000, but Congress on February 4, 1868, passed a law, 
without the President's approval, suspending further retire- 
ment. On March 18, 1869, Congress solemnly pledged the 
faith of the United States to the payment of these notes in 
coin or its equivalent and to make provision at the earliest 
practical moment for their redemption. During the panic of 
1873 the issue was increased to $382,979,815, but under au- 
thority of the resumption act, January 14, 1875, retirement of 
the notes was again undertaken and by May 31, 1878, the 
amount outstanding had been reduced to $346,681,016, where 
it has remained ever since, as on that date Congress passed an 
act forbidding further cancellation and directing the reissue 
of such as might be redeemed. 

The resumption act went into effect January i, 1879. On 
December 17, 1878, for the first time since 1861, the notes 
reached parity with gold, where they have remained ever 
since. Their lowest status had been reached in 1864, when 
they were worth less than fifty cents on the dollar. 

The resumption act authorized the Secretary of the Treas- 
ury to sell bonds to secure coin for redemption purposes and 
also to make use of any other available Treasury coin. As a 
result the Treasury on January i, 1879, l^^^^d over $114,000,000 



534 SMITH'S FINANCIAL DICTIONARY. 

of available gold. From that time it was the established 
policy of the government to keep on hand a reserve of $ioo,- 
000,000 in gold for redemption purposes and by the act of 
March 14, 1900, that reserve was increased to $150,000,000. 
The word redemption, as used in this connection, is, however, a 
misnomer for the reason that while the government is com- 
pelled to pay gold on demand for all United States notes pre- 
sented it is not allowed to cancel the notes so redeemed but 
must reissue them in the ordinary course of business. Thus, 
they get into circulation and may be and often are again pre- 
sented with a demand for gold. This process has come to be 
known as the endless chain and by its operation the govern- 
ment has been forced to supply and pay out gold to an 
amount far in excess of the total amount of the notes. At the 
same time the debt represented by the notes has not been re- 
duced in the least, while the notes themselves are still avail- 
able for the purpose of extracting more gold from the Treas- 
ury. So active was the working of the endless chain in 1894, 
1895 and 1896 that at one time the gold reserve was reduced 
to $42,000,000. Four separate bond issues, amounting in all 
to $265,000,000, were found necessary in order to preserve the 
redemption fund and maintain the credit of the notes. 

United States notes are issued in denominations of $1, $2, 
$5, $10, $20, $50, $100, $500, $1,000. They are exchangeable 
for all kinds of money. except gold certificates, but including 
gold coin, and are a full legal tender for the payment of debts 
except as otherwise expressly stipulated in the contract. 

Unit of value. The unit of value in the United States is 
the gold dollar of 25.8 grains, nine-tenths fine ; that is nine- 
tenths gold and one-tenth alloy ; worth 100 cents. 

In the first mint law of the United States the gold eagle was 
declared to be "of the value of ten dollars or units." 

For additional information see Moneys of the world. 

Unliquidated damages. Unascertained damages. 

Unlisted stocks. This is the common designation for stocks 
which, in official terms, have been ''admitted to quotation in 
the unlisted department" of the New York Stock Exchange. 
Admitted to quotation means admitted to dealings. For de- 
tails as to unlisted stocks see Admitted to dealings at the New 
York Stock Exchange. 



SMITH'S FINANCIAL DICTIONARY. 535 

The term unlisted does not apply to a stock that is not dealt 
in on the New York Stock Exchange at all. Such a stock is 
an outside stock. 

Unloading. In Wall Street the term unloading means dis- 
posing of stocks. 

Unsecured. Not protected against loss. 

Unsecured creditor. One whose claim is not secured (pay- 
ment not insured) by either a pledge of property or a lien. 

Upset price. The lowest price that will be accepted, a 
term frequently used at auction sales or in offers otherwise of 
property in competition. 

UR. As printed on the tape by the stock ticker these let- 
ters mean under the rule ; see Under the rule. 

Usance. A period of time, variable as between different 
countries, which, by commercial usage, is allowed for pay- 
ment of foreign bills of exchange, exclusive of days of grace. 
On bills drawn in China and India on European centres com- 
mercial usage has established a usance of four months. 
Double-usance and half-usance are recognized. 

Usury. A premium paid or stipulated to be paid for the 
use of money borrowed beyond the rate of interest established 
by law; illegal profit from the lending of money. 

Utter. To issue, as to utter (issue) a check, bill of ex- 
change (draft) or promissory note. 

The word utter, however, is generally used in connection 
with the issuance of a forged instrument (as a forged check, 
bill of exchange or draft, promissory note, etc.) or with the 
issuance of counterfeit money. 
. Utterer. One who utters : see Utter. 



536 SMITH'S FINANCIAL DICTIONARY. 



V 



Valuation. Estimated worth or value ; appraisement. 

Value. The rate of worth set upon a thing. 

Value bill (of exchange). A draft (bill of exchange) drawn 
against a consignment of property. For instance, if A in New 
York ships goods to B in London and draws on B for the value 
of the goods, attaching the bill of lading, insurance policy, 
etc., to the draft (bill of exchange), the bill is a value bill. 

Again, if a banker in New York sells securities to a banker 
in London and draws on the banker in London for the value of 
the securities, attaching the securities to the draft (bill of ex- 
change), the bill is a value bill. 

See Non-value bill (of exchange). 

Value of silver. See Silver bullion. 

Value received. A term used in a promissory note or bill 
of exchange to indicate that the note has been made or the bill 
accepted for a consideration and not for accommodation. 

Vanderbilt railroads. Railroads controlled by Vanderbilt 
interests : Chicago & Northwestern, Cleveland, Cincinnati, 
Chicago & St. Louis (Big Four), Lake Shore & Michigan 
Southern, Michigan Central, New York Central & Hudson 
River, New York, Chicago & St. Louis (Nickel Plate), and 
West Shore. 

Vendee. The person to whom a sale is made. 

Vendor. The person who sells. 

Vendor's shares. English ; shares issued to a vendor by a 
company in payment or in part payment for property acquired 
from the vendor (seller). 

Via. A term sometimes applied to a bill of foreign ex- 
change. When drawn in duplicate or triplicate each bill is 
called a via; but if only one bill is drawn it is called sola. 

Vice-president. One who acts in place of the president, as 
in the absence of the president; see President. 

Vise. An official indorsement on a passport or other docu- 
ment certifying that it is correct. 

Visible supply. Trade term for stocks of grain in public 



SMITH'S FINANCIAL DICTIONARY. 527 

elevators in large cities and afloat on lakes, rivers and canals. 

Voting trust. This is created by placing the stock of a com- 
pany, either all or a majority, in a trust, usually for a specified 
period, for voting purposes. Thus, the control of the company 
is locked up in the hands of trustees. Receipts for the stock 
are issued and these may be dealt in and receive dividends 
the same as the stock itself, but they have no voting power. 

Voting trust certificate. When the stock of a company is 
lodged in a voting trust so that the voting power of the stock 
is confided to the trustees of the voting trust (commonly desig- 
nated voting trustees) certificates or receipts for it, called 
voting trust certificates, are issued in place of and represent 
ownership of the stock. The certificates are dealt in and 
transferred the same as the stock and when the voting trust 
terminates or is dissolved the certificates are exchanged for 
the stock itself. 

If dividends are declared on the stock while the voting trust 
is in force they are paid to the holders of the voting trust cer- 
tificates. The certificates, in brief, are in all respects the 
equivalent of the stock, with the exception that they do not 
possess voting power. 

Voucher. A receipt. 



W 



W. As printed on the tape by the stock ticker this letter 
means west or western. 

Warehouse receipt. A receipt for goods placed in a ware- 
house. It is assignable and the transfer of it completes the 
delivery of the property represented by it. 

Washing. A Wall Street colloquialism used to describe the 
operation of simultaneously buying and selling the same stock 
for the purpose of making quotations and generally for the 
purpose of inducing speculation in the stock by imparting ap- 



538 SMITH'S FINANCIAL DICTIONARY, 

parent activity to it. The transaction is fictitious and so is 
the price. 

Also see Manipulation. 

Watch my number. -Each member of the New York Stock 
Exchange has a number. When it is desired to call a broker 
from the floor of the exchange his number is made by means 
of an electrical device to appear on an annunciator on the 
wall of the board room. If a broker has occasion to leave the 
room he requests some fellow-broker to "watch my number" 
in order that he may be apprised on his return if he has been 
called for. 

Watered stock. A colloquialism used when the capital 
stock of a company is increased in amount without a corres- 
ponding increase in assets. When a stock dividend is de- 
clared the original stock is watered to that extent unless the 
new stock represents added property or value in some form. 

Weather-crop report. A report issued weekly (on Tues- 
day) in the crop seasons by the weather bureau of the Agricul- 
tural Department in Washington and designated the "Week- 
ly summary of crop conditions." It tells of the weather in 
the week preceding and of its influence or eflfect, whether 
favorable of unfavorable, on the growing crops. 

Also see Government crop report. 

Welching. A colloquialism, meaning evasion of payment of 
losses fairly sustained. 

Westralians. London Stock Exchange name for shares in 
West Australian mining, land and other companies ; another 
name is Kangaroos. 

Wheat states. The states which produce large crops of 
wheat, viz : Winter wheat states (those which produce large 
crops of winter wheat) — Colorado, Illinois, Kansas, Kentucky, 
Alaryland, Missouri, Pennsylvania, Oklahoma, Oregon, Ten- 
nessee, Texas. Spring wheat states (those which produce 
large crops of spring wheat) — Iowa, Minnesota, Nebraska, 
North Dakota, South Dakota, Washington, Wisconsin. 

When issued. A term employed when dealing in a stock 
not yet issued. When a stock is sold w. i. it is deliverable 
when, as and if issued. This is a stock future corresponding 
to a grain, cotton or coflfee future, except that it is indefinite 
as to time. 



SMITH'S FINANCIAL DICTIONARY. 539 

Whipsawed. A Wall Street colloquialism^ meaning that a 
loss has been sustained both ways — first in buying and then 
in selling short, or vice versa. 

White list. The list of the transactions in detail in all 
stocks and bonds dealt in on the New York Stock Exchange 
printed on white paper daily. It is divided into three parts, 
the first containing sales from 10 a. m. to 12 noon, the second 
containing sales from 12 to 2 p. m. and the third containing 
sales from 2 to 3 p. m. 

White money. A colloquial name for silver money. 

Wholesale. Goods sold in quantity to retailers are goods 
sold at wholesale. 

WI. As printed on the tape by the stock ticker these letters 
mean when issued ; see When issued. 

Wide margin. A Wall Street designation for an unusually 
large margin. 

Wide opening. In an excited market the opening prices 
for stocks (or for commodities) may simultaneously be wide 
apart (widely different) for the same stocks ; in such a case it 
is described as a wide opening. 

Wide prices. Prices that are not near together ; that are 
wide apart. The term applies when a bid and an asked price 
are separated by i or 2 per cent or more instead of by a 
fraction, as, for instance, 100 bid and 105 asked. Again, the 
term applies to fluctuations in a stock or a commodity in 
which the fluctuations are large (wide). The term also ap- 
plies when transactions occur simultaneously in a stock or a 
commodity at prices wide apart (widely separated). 

Also see Wide opening. 

The opposite of wide prices is close prices ; see Close prices. 

The term wide price as used on the London Stock Exchange 
means that the price at which a jobber _ (practically a whole- 
saler) will sell a stock is widely different from the price at 
which he will buy the same stock. See Jobber. 

Wildcat money. A name applied to the depreciated or 
worthless money formerly issued by state banks that became 
insolvent ; also called red dog money and yellow dog money. 

The term wildcat money applied 'originally to the circulat- 
ing notes (money) of banks in the wilds of Wisconsin. These 
banks were organized after the enactment of the general bank- 



540 SMITH'S FINANCIAL DICTIONARY. 

ing law of the state in 1852 and they were located in the most 
obscure places, often in huts in forests. The banks were 
created solely for the purpose of issuing circulating notes and 
were established at inaccessible points in order to prevent the 
presentation of their notes for redemption. As their surround- 
ings were in many instances the habitat of wildcats the banks 
were called "wildcat banks" and their notes were called "wild- 
cat money." Eventually the term wildcat was applied to all 
unstable banks throughout the country and to the depreciated 
notes of such banks. 

Wildcat scheme. A term which signifies a visionary if not 
a dishonest scheme. 

William Paterson. William Paterson was the original pro- 
jector of the Bank of England. He was born in Scotland in 
1658 and died in London in 1719. The plan for the Bank of 
England was presented by him to the government in 1691 and 
the charter of the bunk was issued July 27, 1694. He was a 
director of the bank for a single year only. 

He also projected a plan for colonizing the Isthmus of 
Darien by the formation of a company called the "Com- 
pany of Scotland for trading to Spain and the Indies." He 
joined the ill-fated expedition which set out from Scotland 
to Darien in 1698. He returned home in 1699 and in 1700 re- 
moved to London, He was afterwards a member of Parlia- 
ment. 

Wind bill. In Scotland an accommodation bill is called a 
wind bill. 

Winding up. English term for the liquidation of a company. 

Window dressing. A term used when banks accumulate 
cash to make a showing in the statements which they are re- 
quired by law to publish. 

Winter wheat states. The states which produce large crops 
of winter wheat, viz : Colorado, Illinois, Kansas, Kentucky, 
Maryland, Missouri, Pennsylvania, Oklahoma, Oregon, Ten- 
nessee, Texas. 

^ Wiped out. A Wall Street colloquialism employed when a 
transaction is closed by the exhaustion of margin or principal. 

Wire. To wire mean^ to communicate by telegraph. 

Withdrawn. On an exchange when a bid or offer is made 
and the one making it says "Withdrawn" before it is accepted 



SMITH'S FINANCIAL DICTIONARY. 541 

the bid or offer no longer holds good. Once accepted, how- 
ever, there can be no withdrawal except by consent of both 
parties to the transaction. 

With exchange. When the words "with exchange" are 
appended to a draft the charge for the collection of the draft 
is to be collected from the payer (the one who is to pay) as 
well as the amount of the draft itself. Thus, if a person in 
New York draws on a person in Chicago "with exchange" the 
person in Chicago has to pay the charge imposed for forward- 
ing the draft to Chicago and obtaining payment of it as well 
as the amount of the draft itself. 

With exchange is different from in exchange ; see In ex- 
change. 

With interest. Means with interest added. When a promis- 
sory note contains the words "with interest" without specify- 
ing the rate it is understood that the legal rate is to be paid. 

Without recourse. The words "Without recourse to" be- 
fore an indorsement on the back of a promissory note or bill of 
exchange (draft) absolve the person so signing from any legal 
process by the holder in case payment at maturity is not made. 
In other words, the indorser is a mere assignor of the title to 
the paper and is relieved from responsibility for its payment. 

Witnessed. When a signature is witnessed it is authenti- 
cated by the signature of another or others. 

Worked for export. Trade term used when grain has been 
sold and worked out of a storehouse into the hold of a vessel. 

Working capital. Actual money required to carry on a 
business. 

Working expenses. Same as operating expenses ; the ex- 
penses involved in the operations of a company. 

Working partner. English term ; same as active partner. 

World's shipments. Designation for the weekly shipments 
of grain from exporting to importing countries. 

Writing off. Debiting the profit and loss account with a 
loss ; cancelling a debt as far as the debtor is concerned. 



542 SMITH'S FINANCIAL DICTIONARY, 



X 



X. As printed on the tape by the stock ticker this letter 
means ex-coupon or ex-dividend or ex-interest. 

Also, X is the same as Ex; without or not including, as ex- 
dividend or ex-interest. 

X-d. Ex-dividend, that is, without the dividend. If a stock 
upon which a dividend has been declared is sold and the sale is 
not to include the amount of the dividend the stock is sold ex- 
dividend. 

X-i. Ex-interest; that is, without interest, or in other 
words, interest not included. 



Y 



Yankee rails. London Stock Exchange name for the stocks 
of American railroads ; same as American rails. 

Yankees. London Stock Exchange name for American 
railroad securities. 

Yellow dog money. A contemptuous name applied to the 
paper money formerly issued by state banks which failed. For 
additional information see Red dog money ; also see Wildcat 
money. 

Yellow money. A colloquial name for gold money. 

Yield. This term is often used to signify the percentage of 
return in interest or dividends. For information see Income 
basis. 



SMITH'S FINANCIAL DICTIONARY. 543 



Zero. The lowest point in any standard of comparison. 

Zollverein. A union of separate states for the establish- 
ment of a common tariff of duties on imports from other coun- 
tries and for the establishment of free trade among them- 
selves. 

Zone. In agriculture this term means the same as belt, as 
the cotton or the corn belt. 



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